Yahoo Finance UK car industry warns no-deal Brexit could cost manufacturers £50,000 per minute
Britain’s car industry has strong words for the UK’s next prime minister: leaving the European Union without a deal would wallop the country’s car industry with costs of £50,000 per minute.
“The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, ‘no deal’ is not an option and we don’t have the luxury of time,” Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT), said Tuesday at the industry’s annual International Automotive Summit in London.
“Leaving without a deal would trigger the most seismic shift in trading conditions UK automotive has ever experienced,” Hawes said.
In SMMT’s 2019 UK Automotive Trade Report, the association notes that deliveries of parts to car plants are measured in minutes, and hard-Brexit border delays could potentially cost manufacturers relying on just-in-time shipments “£50,000-a-minute, or some £70 million a day in a worst case scenario.”
“Combined with WTO tariffs, which for trade in passenger cars alone amount to £4.5 billion a year, this would deliver a knockout blow to the sector’s competitiveness, undermining a decade of extraordinary growth,” according to the report.
The SMMT notes that the automotive industry is the UK’s single biggest exporter, accounting for more than 14% of total exports. It directly employs 168,000 people and contributes £18.6bn annually to the public purse.
The UK is the world’s 10th biggest exporter, Hawes said, but “take out automotive and we fall to 14th, behind Canada, Mexico, and Belgium.”
Boris Johnson, currently the favourite to take over as prime minister from Theresa May, has said he would take Britain out of the EU by 31 October with or without a deal.
READ MORE: German firms increasingly pessimistic about export economy
