Mike Hawes, the chief executive of UK’s Society of Motor Manufacturers and Traders (SMMT) said that the British motor industry is not ready for Brexit, with car makers being increasingly concerned about the looming prospect of a no-deal divorce with the EU.
Production of vehicles in the UK dropped by 47 percent in June, with SMMT calling it an anomaly due to model cycles, operational changes and preparation for the new WLTP emission standards.
However, Hawes said that the figures are a “reminder of the exports-led nature” of the UK car industry, according to the Guardian. The head of SMMT added that this showed the importance of UK striking a deal with the EU, which is the destination for 53 percent of UK car exports, warning that a lack of clarity on Brexit has left the industry struggling to prepare for the country’s departure in March 2019.
“No one would profess to being Brexit-ready because there are too many variables in there,” he said. “We need a deal. If we have no deal, there is no transition, there is no implementation period, that would kick in less than eight months away. You can operate on WTO [World Trade Organization] trade rules but it would be at a significant extra cost and burden than we currently enjoy.”
When asked if there were any potential Brexit benefits for UK’s automotive industry, Hawes said: “Not that we can see.”
The lack of clarity is already taking its toll on the industry as investments have collapsed, while Jaguar Land Rover said that a no-deal Brexit could force them to pull out of the UK.
“Given the cost of stopping production, manufacturers will do everything they can to stop that happening,” Hawes said, adding that this would cost millions of pounds per day.
“You survive on the basis that you’re competitive. Once you cease to be competitive – you generally don’t shut overnight – but your ability to attract that next round of investment is that much tougher. Gradually, it’s a death by a thousand cuts.”