Mike Hawes

Car industry risks ‘death by a thousand cuts’ without Brexit rethink

Mike HawesProgress on Brexit needs to speed up in order to allay growing automotive industry concerns and address a marked slowdown in investment, the Society of Motor Manufacturers and Traders (SMMT) has warned.

The automotive industry trade body is today presenting its latest report on the health of the UK car sector, which shows that manufacturing turnover hit a record £82 billion in 2017. However, it says this success risks being reversed without the speedy conclusion of a deal that clarifies Britain’s regulatory and customs relations with the EU.

Already in 2018, inward investment in the car industry has suffered a marked slowdown. Less than £350 million has been committed to new models and factories in the UK – that’s half the amount invested in the first half of 2017. Production output has slowed and there have been job cuts.

“There is growing frustration in global boardrooms at the slow pace of negotiations,” said SMMT chief executive Mike Hawes. “The current position, with conflicting messages and red lines, goes directly against the interests of the UK automotive sector which has thrived on single market and customs union membership.

‘No Brexit dividend for cars’

Vauxhall Ellesmere Port

“There is no credible ‘plan B’ for frictionless customs arrangements, nor is it realistic to expect that new trade deals can be agreed with the rest of the world that will replicate the immense value of trade with the EU.”

Hawes’ demand was stark: “Government must rethink its position on the customs union.

“There is no Brexit dividend for our industry, particularly in what is an increasingly hostile and protectionist global trading environment. Our message to government is that until it can demonstrate exactly how a new model for customs and trade with the EU can replicate the benefits we currently enjoy, don’t change it.”

Speaking earlier to the BBC, Hawes said the risk was “death by a thousand cuts”. The slowdown in investment would lead to a weakening of the UK car industry as manufacturers invested elsewhere. 

“With decisions on new vehicle models in the UK due soon,” said the SMMT, “government must take steps to boost investor confidence and safeguard the thousands of jobs that depend on the sector.”