SMMT calls for ‘soft’ Brexit

The Society of Motor Manufacturers and Traders (SMMT) has warned the government to expect job losses in the industry if Britain negotiates a ‘hard’ Brexit and leaves the single market.

Speaking at the Paris Motor Show, SMMT boss Mike Hawes said, ‘The car industry in Britain is booming with record exports. That’s great news. But it may not last if Britain leaves the single market.

‘We respect the Brexit vote. But it must not be a hard Brexit. We need to stay in the single market. Our fear is that people are being blinded by the good news today and being lulled into a false sense of security.

‘Today’s success is based on investment decisions made five or more years ago. The future of jobs and investment in 2020 depend on decisions being taken now. And we are clear we want the UK to remain in the single market.’

The SMMT statement came as senior leaders at Aston Martin, BMW MINI, Honda, Jaguar Land Rover, McLaren, Nissan, Toyota and Vauxhall met trade minister Mark Garnier in Paris to make the case for the British automotive industry.

Mike added, ‘Car manufacturers need to be in a single market free of tariffs. Nobody says this will be easy. No doubt we will be accused of scare-mongering. But we are not. We don’t want to leave the Government or anyone else in any doubt. Thousands of UK jobs and billions of pounds of future investment are at stake. That’s our message to ministers.’

The SMMT recently published figures showing that the UK is in course for a record export year, with nearly 900,000 units leaving the UK between January and August. However, with more than 500,000 of those going to other EU countries, the SMMT believes growth could stall if that trade is hit by tariffs.

Minister Mark Garnier said he understood the concerns of the industry regarding zero tariffs and the need to attract skilled workers from Europe, adding, ‘All of these factors will form part of the negotiating process. Europe and the EU is absolutely still a major trading partner to the UK. I look forward to working closely with the industry so that we can continue to take advantage of the global demand for British-made vehicles and drive exports further.’

The UK auto industry’s trade association, the SMMT, has hailed the sector’s dynamism and contribution to the UK economy, in an event at the Eiffel Tower ahead of the Paris Motor Show.

The event today comes amid considerable uncertainty over the future trading arrangements between the UK and the EU following the summer referendum result in favour of the UK leaving the EU. The automotive manufacturing sector is concerned that tariffs could be imposed on UK-EU trade, a move which could increase costs and harm international competitiveness for UK producers. The SMMT has said that it considers free-trade between the UK and EU in automotive products as an essential part of a future deal between the UK and the EU’s remaining states. However, the UK’s government has yet to determine its negotiating position ahead of the triggering of formal negotiations to leave the bloc.

The SMMT has today again stressed the importance of the EU as an export market for UK-produced vehicles.

Eight of the UK’s major car brands were present at the Eiffel Tower in Paris to ‘demonstrate the diversity and quality of cars currently produced in the UK.’ Senior executives from British-based manufacturers, including Aston Martin, BMW MINI, Honda, Jaguar Land Rover, McLaren, Nissan, Toyota and Vauxhall, were joined by Mark Garnier MP, the British Parliamentary Under Secretary of State at the Department for International Trade, to promote the strength of the UK automotive sector to a global audience.

The SMMT said in a statement that the UK automotive industry has ‘undergone unprecedented growth in recent years – thanks to competitive business conditions, tariff-free trading and significant investment in new models and facilities.’ It also pointed out that car manufacturing achieved a 10-year high last year with a record 1.2 million cars exported to more than 100 countries. Already in the first eight months of 2016, that total looks set to be beaten this year, with exports reaching almost 900,000 vehicles – 13% ahead of the same period in 2015.

The UK’s biggest trading partner is the European Union and 57.3% of UK-produced cars have been exported to the rest of the EU so far this year, followed by 12.1% to the US and 7.1% to China. While the US topped the list of individual countries buying British cars, EU Member States took six of the top 10 places: Germany, Belgium, Italy, France, Portugal and Spain, the SMMT noted.

Mike Hawes, SMMT Chief Executive, said: ‘The UK automotive industry is respected globally for its rich heritage, iconic brands and engineering excellence. More than £10 billion of investment has gone into new facilities and models over the past five years and we’re proud to see so many rival brands coming together to promote the strengths of UK Automotive ahead of a key international motor show. The future success of this sector will hinge upon the ability of the UK to maintain the business and trading conditions that make the sector so competitive globally.’