SMMT counts cost of ‘no deal’ threat

The report, conducted in September 2019 before the latest efforts to broker an exit deal, also found that over 80 per cent of SMMT members were concerned about damage to their future business prospects if no agreement was reached. If the UK crashes out of the EU without a deal, WTO tariffs of 10 per cent on automotive imports and exports will cost the UK car industry an estimated £5bn. Previous research carried out by the SMMT found that the sector has already outlaid £500m on mitigation measures that will not deliver returns.

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“Damage has already been done,” said SMMT chief executive Mike Hawes. “Investment is haemorrhaging, competitiveness being undermined, UK jobs cut and vast sums wasted on the impossibility of preparing for ‘no deal’. Make no mistake, every day ‘no deal’ remains a possibility is another day of lost investment, another day that makes it harder to recover investor confidence in the UK.

“As yet, the damage is not irreversible. But we need a deal. A deal that, in the short term, enables a ‘business as usual’ transition for as long as it takes to negotiate and implement the future trading relationship. In the longer term, that deal must replicate all of the benefits we currently enjoy which means an ambitious deal that delivers free and frictionless trade. UK jobs, innovation, trading strength and economic growth all depend on the automotive sector so we urge all parties to get a good deal done before it is too late.”

In a sign that the spectre of ‘no deal’ has already hurt the UK, 11.8 per cent of automotive firms said that they had already divested from their UK-based operations, with 13.4 per cent relocating operations overseas. Overall, more than three quarters (77.2 per cent) of firms say that there has already been a negative impact on business, despite the the UK having not left the EU.