No-deal Brexit could cost UK automotive £4 billion a year

No-deal brexit warnings

There have been more warnings come that a no-deal Brexit could hit the UK car industry hard, to the tune of £4 billion every year.

Costly challenges include the exporting of cars, parts supply and border controls. Just getting new cars built in the UK is predicted to be extremely challenging, according to a report by GlobalData.

No-deal brexit warnings

“A no-deal Brexit could lead to significant delays at borders as new customs checks are applied,” said Ian Henry, writer of the report, director of AutoAnalysis and visiting professor at Birmingham City University’s Centre for Brexit Studies.

“Those delays will cost manufacturers money due to lost time and necessitate the stockpiling of components as the Brexit deadline approaches.”

Parts stockpiling is necessary to minimise manufacturing disruption if the UK leaves without a deal. A circa. £700 million cost is expected to affect low volume manufacturers. Higher-volume car and LCV exports could suffer to the tune of £2.7 billion. 

“Regulatory alignment with the EU must be maintained if UK manufacturers wish to export their cars overseas,” continued Henry.

No-deal brexit warnings

“The UK Government may like to talk about the opportunities open to the UK economy after Brexit, but it is difficult to see what these are. The Society of Motor Manufacturers and Traders (SMMT) has described Brexit’s impact on the automotive manufacturing industry as ‘like death by a thousand cuts’. It is very difficult to argue against this view.”

The associated costs with a no-deal Brexit are such that they wouldn’t long be contained by the automotive sector. The effects are expected to reach far beyond and “ripple through the value chain causing widespread economic and social disruption”.

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