The Society of Motor Manufacturers and Traders (SMMT) has called on the government to deliver a Brexit deal that keeps Britain in the European customs union and maintains single market benefits.
The statement comes in light of the 19th annual Sustainability Report, which showed a record turnover of £82bn in 2017, an eighth consecutive year of growth. The SMMT has stated there is ‘growing concern that progress could be reversed in the absence of clarity on our future regulatory and customs relations with the EU’.
The SMMT is one of the largest trade associations in the UK. Its mantra is to ‘support the interests of the UK automotive industry at home and abroad, promoting a united position to government’.
Despite a positive performance last year, in the first six months of 2018 automotive production output has fallen alongside slowing demand in the new vehicle markets. Only £347.m has been assigned for new models, equipment and facilities in the UK, less than half the sum announced in the same period last year.
An SMMT release said: “Government must take steps to boost investor confidence and safeguard the thousands of jobs that depend on the sector. Leaving the single market and customs union will bring an end to the seamless movement of goods that UK Automotive relies upon, with more than 1,100 trucks from the EU bringing components to car and engine plants every day.”
Prime Minister Theresa May has ruled out the UK staying in the customs union after Brexit. The UK is due to leave the European Union on March 29th 2019.
SMMT chief executive Mike Hawes 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.”
The SMMT warning comes after the head of UK BMW Ian Robertson described Brexit as a ‘decisive issue that ultimately could damage [the motor] industry’.
SMMT figures released last month showed a 6.8% drop in UK vehicle registrations by year on year comparison from January to May.
SMMT customs union departure ‘Death by a thousand cuts’
In an interview with the BBC’s economics editor, Hawes went on to say that the effects of leaving the customs union would not be seen overnight but could be more like ‘a death by a thousand cuts’.
“It won’t be an overnight closure but it could be a death by a thousand cuts,” he told the BBC. “Gradually the competitiveness of the UK is eroded, making it that much harder to attract the investment, and it’s the investment that makes it [the UK car sector] so competitive. We still need to see significant additional progress [on Brexit].
“The way the industry works – with investments over four or five years – you will see over the next couple of years, particular plants will reach that decision point. What we have seen over the last six months is that investment has been declining.
“Investment in the automotive industry is always a bit lumpy, but if you match what is happening in terms of total investment with what we hear, we are seeing companies sitting on their hands for as long as possible.
“But it reaches the point you have to make that decision, that’s when you need the clarity,” he added.nion
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