No-deal Brexit ‘would cost car industry £70m a day’

car sales

The British car industry has warned the government that border delays could cost it up to £50,000 per minute if the country leaves the European Union without an agreement.

The sector said that a hard Brexit could deliver a “knockout blow” to its competitiveness on the global stage.

The Society of Motor Manufacturers and Traders (SMMT) urged whoever succeeds Theresa May to maintain frictionless trade with the European Union, insisting that, with the right decisions, “a bright future is possible” outside the bloc.

Projections released by SMMT suggest that UK automotive producers and suppliers would face costs of about £70 million each day in a worst-case scenario, where “crippling disruptions” at the border fracture just-in-time manufacturing lines.

Boris Johnson and Jeremy Hunt, the two candidates for prime minister, have both said that they would be prepared to leave the European Union without a deal should further talks with Brussels fail to bear fruit.

The British car industry directly employs 168,000 staff, generating a turnover of £82 billion and exporting goods worth about £44.4 billion last year. It made about 1.3 million vehicles for overseas markets in 2018.

Mike Hawes, SMMT chief executive, insisted that its latest modelling on Brexit is “not Project Fear” but a “fact-based” analysis of the consequences of leaving without a deal.



“We’ve always sought to do that throughout,” he told a news conference. “If you go back to the referendum, yes, I know industries and business got criticised for scare tactics. We never said that you’ll wake up on June 24, 2016 and the factories will need to be shut.

“What we’ve said consistently, and this still holds true, is more death by a thousand cuts. You gradually erode the competitiveness of the industry, it makes it that much harder to invest in the future.”

Investment has already stalled, Mr Hawes continued. “When the big investment decisions come, the new model, that’s when you’re competing with other plants, that’s when you need to be at your most efficient. And if in the previous two or three years you have underinvested, it makes it that much harder.”

The SMMT said in a statement that “the right deal” with Brussels could boost the British car industry’s global trade value by £20 billion, or a fifth.

“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,” Mr Hawes said. “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 don’t have the luxury of time.”