The Society of Motor Manufacturers and Traders has urged all parties to put UK Automotive at the heart of their economic and trade policies.
Setting out the industry’s priorities for a new government, the trade body called for an ambitious, world-beating Brexit trade deal to maintain the sector’s competitiveness and ability to deliver innovation, productivity and prosperity for Britain.
Speaking at the 103rd SMMT Annual Dinner in London, SMMT President George Gillespie outlined the industry’s vision for a better, safer and cleaner future, saying, “The automotive sector is going through a period of unprecedented change and we must not let the pressure of Brexit deflect from our focus on a coherent national industrial strategy.
“Collaboration between industry and government must be stronger than ever… We want to work closely with the next government, as we have in the past; united in a common purpose to keep UK Automotive a global player that drives employment, creates wealth and gives all of us pride in what we can do here.”
He spoke as SMMT revealed new figures showing the devastating impact of Brexit without an ambitious trade deal. Independent research commissioned by the trade body shows WTO tariffs on imported components and exported vehicles would add more than £3.2 billion a year to UK automotive manufacturing costs.
Such a colossal increase – equivalent to almost 90% of the sector’s annual spend on R&D – could not be absorbed, forcing prices to rise and global demand to shrink. At a time when additional investment in ever safer, cleaner and more intelligent mobility technology is essential, this would be a tragic waste.
The analysis estimates the impact of such tariffs could result in the cumulative loss of more than 1.5 million units from UK production volumes over the next five years, worth some £42.7 billion at factory gate prices. Under this scenario, by 2024, falling demand and model reallocation to more competitive and welcoming production locations would see annual output falling to just 1 million vehicles per year.
Automotive is one of the UK’s most valuable economic assets, exporting more goods than any other sector to over 160 countries worldwide. The manufacturing sector is directly responsible for putting food on the tables of 168,000 British workers and their families.