Following the triggering of Article 50 that has begun the slow and complicated removal of the UK from the European Union, the UK car industry issued their own stark warning.
Leading figures in the £72bn-a-year industry have expressed their concerns about the amount of time it will take to strike a deal that protects the future of the automotive sector. While there is confidence in the support provided by the Government, ensuring that a tariff-free deal is secured during the negotiations remains of paramount importance.
Mike Hawes, Chief Executive of trade group SMMT commented:
“Triggering Article 50 has started a race against time to secure a deal that safeguards the future of the UK automotive industry. That means certainty in our relationship with our biggest market, tariff-free and open borders so products, parts and investment can flow freely.”
Production in the car industry is currently at a 17-year high, with over half of the 1.7m cars produced in the UK exported to Europe. This accounts for 12% of Britain’s exported goods and there is fear of a 10% levy being imposed in the short or even long term, a tariff that would have far reaching effects.
If freedom of movement is restricted, sourcing the vital components needed to manufacture the average car would become far more difficult. The SMMT have calculated that the industry could face a bill of up to £4.5bn, split between the assembly of cars in the UK and those exported to the EU.
Job security would also be a growing concern, given that there are over 770,000 people either directly employed or supported by the industry. Without a deal in place, the SMMT are concerned that jobs could be lost as a result.
The trade body are not only in making their voices heard. Both Ford and Jaguar Land Rover have urged the Government to put together a deal that avoids a tariff being imposed, calling for a transitional agreement to be struck, given the short time frame allowed for the discussions.
