Brexit uncertainty ‘risks investment’, warns UK car industry

UK Prime Minister Theresa May this week formally triggered Article 50, confirming the country’s intention to withdraw from the European Union. 

But as Brexit officially got underway, the Society of Motor Manufacturers and Traders (SMMT) renewed an earlier call for the automotive sector to be placed at the heart of negotiations, suggesting that Brexit could be “the most significant threat to the competitiveness of the UK automotive sector in a generation”.

The industry’s appeal highlights the delicate balancing act facing the UK government as it sets out to negotiate a Brexit deal that does not harm the competitiveness of existing industries.

Adding to this pressure, the government has previously said that it wants the UK to “lead the way” in developing driverless car technology. Several driverless trials are already underway in the UK, but manufacturers around the world are ramping up their development of connected and autonomous vehicles.



SMMT also cautioned that, if no deal is reached at the end of the two-year negotiations, a subsequent adoption of World Trade Organisation (WTO) rules would be the “worst foreseeable outcome” for the sector.

Triggering Article 50 has started a race against time to secure a deal that safeguards the future of the UK automotive industry.
— Mike Hawes, SMMT Chief Executive

The body believes that a switch to WTO rules would risk adding £1.8 billion to the cost of fully assembled cars exported from the UK and £2.7 billion to those imported from the EU – potentially adding £1,500 to the cost of every one sold in the UK.

“Triggering Article 50 has started a race against time to secure a deal that safeguards the future of the UK automotive industry,” said Mike Hawes, SMMT Chief Executive. 

“Government has committed to creating and supporting the right conditions for our industry to be successful. That means certainty in our relationship with our biggest market, tariff-free and open borders so products, parts and investment can flow freely, and continued influence over the regulation that governs the vehicles we build and drive. 

“We will continue to work with government and our European counterparts but no deal is not an option. Now is the time for government to deliver.”

SMMT is calling for the government to negotiate equivalent single market benefits, with zero tariffs and no trade barriers with the EU.