The UK automotive sector risks losing £55bn in manufacturing value within five years within the event of a no-deal Brexit. New Industry analysis says British car production could drop below 1m cars a year if there is no deal, compared with over 1.3m in 2019, because tariffs would make large parts of the UK business unviable, said forecasts commissioned by the Society of Motor Manufacturers and Traders, the industry lobby group.
The car industry has endured a difficult year, because the corona-virus pandemic has forced the temporary closure of factories in Europe and reduced demand for new cars. At the identical time, European car companies spent £54bn last year on new car technologies to satisfy tightening CO2 emissions rules. Trade negotiations between the UK and EU have still not reached a conclusion, with little less than a month until the Brexit transition period on 31 December. EU ambassadors are told a deal is near being finalized, but there’s still a risk of talks falling through.
The Society of Motor Manufacturers and Traders is urging the United Kingdom government to induce a deal that avoids resorting to tariffs under World Trade Organization rules. The automotive sector across Europe has already been badly hit by the pandemic, the SMMT said.
A further blow from trade tariffs would set it back further.
An exit without a deal minimizing trade barriers including tariffs would have “a severe impact on the sector’s ability to develop and manufacture the next generation of zero emission cars and vans, additionally as holding back market uptake of these vehicles,” the SMMT said.” Automotive is nothing if not determined, adaptable and resilient, yet, because the clock ticks ever closer to midnight on Brexit negotiations, the competitiveness and employment we would like come to to growth – green growth – hangs within the balance,” said the group’s chief executive, Mike Hawes.
World Trade Organization (WTO) tariffs would cost the uk car business £55.4bn by 2025 with annual production falling below one thousand thousand units, the SMMT estimates UK car production suffered its slowest September since 1995 because the pandemic continued to batter demand, industry figures published last month showed .just 114,732 vehicles rolled off production lines within the month, down 5% on September last year.
UK and European carmakers have warned that a no-deal Brexit could put a £100bn dent within the region’s car industry within subsequent five years, adding to heavy losses already caused by Covid-19.A letter signed by 23 trade groups across Europe in September urged the govt. . to make a deal rather than default to WTO rules. A deal is seen as crucial thanks to how interconnected the industry is, with parts passing many borders as a car is assembled.