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The Society of Motor Manufacturers and Traders (SMMT)is calling on Brexit negotiators to rule out the option of leaving the EU with no deal because the potential tariff bill – at least £5bn for Brits and Europeans alike – would be “just the tip of the iceberg”.

The SMMT says that it would not just be Britain where the industry was affected, but across the whole of Europe as the business is so deeply integrated and crucial to the whole European economy.

They want the “no-deal” option to be dismissed once and for all, and are meeting with EU officials in Brussels to underline the importance of the car industry and the ramifications if there is no deal made.

Mike Hawes, chief executive of the SMMT, said: “Tariffs alone should be enough to focus minds on sealing a withdrawal agreement between the EU and UK, but the potential impact of ‘no-deal’ means the stakes for the automotive sector are far higher.”

“Without a deal, there can be no transition period and the complex issues surrounding tariffs and trade, customs, regulation and access to talent will remain unresolved,” he warned.

“Our industry is deeply integrated across both sides of the Channel so we look to negotiators to recognise the needs of the whole European automotive industry and act swiftly to avoid disruption and damage to one of our most valuable shared economic assets.”

SMMT figures indicate that 2.7m cars and vans traverse the channel every year, with £3.4m of components exported from the UK, and three times that amount imported from suppliers on the continent.

This loosely equates to 1,100 lorry movements every day, mostly without a customs check.

The effect of having no deal would be immediate and significant on the UK car market with 70% of new cars coming from Europe. The impact of tariffs would be that the costs of UK-built cars in Europe would increase by £2,700, and in the UK by £1,500.

The impact is far wider than just on car sales, however, with the industry employing 13.3m people across Europe, contributing 7% of the EU GDP.

BMW, Jaguar Land Rover, Ford, Volkswagen, and Honda have all clamoured over the last few weeks warning of the impact of a no-deal Brexit, warning of the potential for the loss of millions of pounds of revenue and jobs. Jaguar Land Rover this week announced it was to reduce its workforce to a three-day week.

“No-deal is now not an option, as limited progress pushes the sector closer to a cliff-edge.”

The SMMT says it’s time for negotiators to be pragmatic, securing a withdrawal and transition agreement, “and safeguarding one of Europe’s most valuable economic assets.”