Delays at the border caused by a no-deal Brexit could cost the UK automotive sector £70m each day – equivalent to £50,000 a minute.
This is according to the Society of Motor Manufacturers and Traders (SMMT), which said that protecting the UK motor industry, Britain’s biggest exporter, should be the top priority for the next prime minister.
SMMT said that the end to borderless trade could bring “crippling disruptions to the industry’s just-in-time operating model”. The introduction of WTO tariffs, combined with the border delay costs, would see the UK drop down to 14th in the list of the world’s biggest exporters, behind Belgium, Canada, Mexico and Russia, said SMMT.
A report released by the group revealed that automotive trade value has risen by 118% since the global financial recession, from £47bn in 2009 to £101bn last year. Over the same period, car production increased by more than half, with more than 80% of vehicles bound for export – the majority to the EU. Some 3.3m new cars are traded between the UK and EU each year, while the UK exports £5.2bn worth of components and £2.9bn of engines to help build vehicles in Europe.
The report however calculated that the right deal could see a 20% uplift in the industry’s global trade value – worth £20bn.
“Automotive matters to UK trade and to the economy, and this report shows that, if the right choices are made, a bright future is possible,” said Mike Hawes, chief executive at SMMT. “However no-deal remains the clear and present danger.
“We are already seeing the consequences of uncertainty, the fear of no deal. The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, no deal is not an option and we do not have the luxury of time.”