No-deal Brexit must be ruled out to save motor industry, warns SMMT

Follows announcements of shorter working week for Jaguar workers and BMW plant shutdown

A no-deal Brexit must be ruled out because of the threat it poses to the UK motor industry, the Society of Motor Manufacturers and Traders (SMMT) has warned.

The group called on Brexit negotiators to be “pragmatic” and secure a withdrawal agreement to “avoid damaging one of the EU’s most valuable economic assets”.

The trade body is meeting EU representatives in Brussels on Wednesday to highlight the importance of an integrated European motor automotive industry and lay out the repercussions if no deal is reached.

Figures compiled by the SMMT show that a cliff-edge Brexit could mean at least £5bn in tariffs.

However, the organisation said, this would be just the tip of the iceberg for the sector, as these levies could push the cost of UK-built cars sold in the EU up by an average of £2,700, “affecting demand, profitability and jobs”.

Costs for UK buyers of EU-made cars would also go up, by as much as £1,700, if manufacturers and dealerships cannot absorb the costs that tariffs would bring.

Mike Hawes, the SMMT’s chief executive, said: “Tariffs alone should be enough to focus minds on sealing a withdrawal agreement between the EU and UK but the potential impact of no deal means the stakes for the automotive sector are far higher.

“Without a deal, there can be no transition period and the complex issues surrounding tariffs and trade, customs, regulation and access to talent will remain unresolved.”

He added: “Our industry is deeply integrated across both sides of the Channel, so we look to negotiators to recognise the needs of the whole European automotive industry and act swiftly to avoid disruption and damage to one of our most valuable shared economic assets.”

The SMMT’s call for action comes after days of Brexit-related announcements from UK motor manufacturers.

On Tuesday, Honda said a no-deal scenario would cost it tens of millions of pounds, while BMW said it would move a planned shutdown of its Mini plant in Oxford forward to coincide with the beginning of Brexit in order to minimise the risk of disruption.

Meanwhile, Jaguar Land Rover has moved workers at its Castle Bromwich plant to a three-day week because of “continuing headwinds impacting the car industry”. The company’s chief executive, Ralf Speth, last week warned that tens of thousands of jobs in the UK motor industry are at risk if a no-deal Brexit goes ahead.

Unite the Union’s assistant general secretary Tony Burke accused the government of causing uncertainty across the motor industry with its “shambolic approach to Brexit negotiations”.

“Theresa May’s Tory government needs to stop gambling with UK jobs and the future of one of the jewels in Britain’s manufacturing crown by getting a Brexit deal that secures frictionless trade and tariff-free access to the European Union,” he said.