UK car industry on ‘red alert’ over potential no-deal Brexit

The UK’s car industry has sounded the ‘red alert’ over no-deal Brexit

UK car production and investment looks like it could be in major trouble in the event of a no-deal when it comes to Brexit at the end of October.

The Society of Motor Manufacturers and Traders (SMMT) is reporting that vehicle the United Kingdom’s manufacturing fell to a five-year low of just over 1.5 million vehicles in 2018.

Investment in the automotive industry has "stalled" at almost £590m over the 12 months which was down 50% on 2017.

Brexit is probably the single most thing on the industry's mind since the referendum campaign began. They are not looking forward to the prospect of new trade tariffs and supply chain disruption within the industry, which would also make them uncompetitive abroad.

Right now, 8 in 10 cars made in Britain are shipped overseas with industry experts claiming that two-thirds of the industry's foreign sales would be at risk under a hard Brexit. They are fearful of huge job losses as the industry currently employs a workforce of 186,000. The chief executive of the SMMT Mike Hawes said:

"With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK automotive is on red alert.

"Brexit uncertainty has already done enormous damage to output, investment and jobs.

"Yet this is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the EU but with the many other global markets with which we currently trade freely.

"Given the global headwinds, the challenges to the sector are immense.

"Brexit is the clear and present danger and, with thousands of jobs on the line, we urge all parties to do whatever it takes to save us from no deal."

In response to this, the UK government said:

"As we leave the European Union we will seek the broadest and deepest possible agreement that delivers the maximum possible benefits for both the UK and EU economies and maintains the strength of our world-leading automotive sector.

"The automotive industry is a great UK success story, one we are working to grow through our modern Industrial Strategy, Automotive Sector Deal and research funding including millions for the creation of next-generation batteries."

Car manufacturing output has fallen for the second consecutive year across the water and Brexit is mostly to blame. Another factor is also the industry's exposure to diesel powertrains. The challenges are immense, especially with so many jobs at risk if the whole Brexit scenario goes south after no-deal? The government went on to say:

Already the largest manufacturer in the UK and major producer of diesel-powered vehicles, Jaguar Land Rover has announced plans to cut thousands of jobs in a bid to save costs. They are not alone but rivals have also confirmed a series of Brexit contingency plans including temporary production shutdowns.

Author

Justin Kavanagh
Justin Kavanagh is a recognised leader in automotive intelligence and vehicle data supply to the entire motor industry. He has almost 20 years experience in building systems from the ground up. As the Managing Director of Vehicle Management System, he understands the need and importance of trustworthy and reliable vehicle history and advice to both the trade and the public.
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