UK automotive industry urges Brexit rethink

Published:  26 June, 2018

The SMMT today (Tuesday 26 June)  called for swifter progress on Brexit and a deal that, as a minimum, maintains customs union membership and delivers single market benefits.

The call came as the organisation published figures showing record turnover, but amid growing concern that progress could be reversed.

UK Automotive’s 19th annual Sustainability Report reveals the manufacturing sector turned over a record £82 billion in 2017, marking an eighth consecutive year of growth. The sector’s economic contribution now stands at £20.2 billion, although a recent SMMT study showed its impact on adjacent sectors as significantly larger, at around £202 billion – some 10% of UK GDP. Jobs in the UK automotive manufacturing sector rose 2.8% to 186,000, with employment across the wider industry reaching 856,000.

Despite this positive performance last year, the first six months of 2018 have been less encouraging. Production output has fallen alongside slowing demand in the new vehicle markets; job cuts have been announced and investment has stalled, with just £347.3 million earmarked for new models, equipment and facilities in the UK – almost half the sum announced in the same period last year.

Speaking at the industry’s annual Summit, Mike Hawes, SMMT Chief Executive, said, “Today’s figures show the critical importance of the automotive industry to the UK economy. There is growing frustration in global boardrooms at the slow pace of negotiations. 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. 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. Government must rethink its position on the customs union.

Mike added: “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.”

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