Yahoo Finance UK auto industry on 'red alert' amid growing no-deal Brexit threat
The Society of Motor Manufacturers and Traders (SMMT) has put the UK auto industry on “red alert” after investment in the sector almost halved in 2018 and the threat of a no-deal Brexit grows.
The SMMT said in a statement that auto companies in Britain are “urging all politicians to do whatever it takes to avoid a ‘no-deal’ Brexit.”
“With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK Automotive is on red alert. Brexit uncertainty has already done enormous damage to output, investment and jobs,” said Mike Hawes, CEO of SMMT.
“Yet this is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the European Union but with the many other global markets with which we currently trade freely.
READ MORE: ‘Doppelgänger UK’ shows Britain’s economy is 2.3% smaller because of Brexit
Britain is set to leave the EU on 29 March this year, however it is unclear what a Brexit deal will look like or if there will be one at all. The uncertainty over the last two and a half years has been enough to dent investment and impact businesses and the economy.
SMMT revealed that British car production fell to its lowest level for five years in 2018 and this chart shows the steady decline since Britain voted to leave the EU in June 2016.
Exports also tumbled, with output for overseas markets dropping by 7.3%. UK car exports to China crashed by 24.5%, while EU demand fell by 9.6%. Registrations of British-built cars in the UK fell 20.9% in the year.
“Overall, EU27 countries still accounted for the vast majority of UK exports (52.6%) – amounting to 650,628 cars,” the SMMT pointed out.
A downturn in investment in Britain due to Brexit has caused officials concerns.
Last month, UK business investment suffered its biggest fall in three years due to Brexit uncertainty. The IMF also said in November that the Brexit process has affected business investment in the UK. Britain’s biggest business lobby group CBI, representing 190,000 firms, also released a study showing that 80% of companies say that Brexit has hit investment. And in September, the Office for National Statistics (ONS) revealed that businesses have invested £22bn less in the last two and a half years because of Brexit uncertainty.
Earlier this week, think tank Centre for European Reform (CER) said voting for Brexit has caused the economy to shrink 2.3% smaller than if Brits had voted to remain in the EU.
SMMT’s Hawes said: “Given the global headwinds, the challenges to the sector are immense. Brexit is the clear and present danger and, with thousands of jobs on the line, we urge all parties to do whatever it takes to save us from ‘no deal.'”
