No deal Brexit ‘not an option’ warns SMMT chief

A ‘no deal’ Brexit is not an option for Britain’s car manufacturers who’ve posted the twelfth consecutive decline in output.

(Image: Toyota)

This is the stark message from Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), who believes a Brexit deal must be secured soon to help reverse the decline.

According to SMMT, output in May fell 15.5 per cent with 21,239 fewer units manufactured. The organisation said that manufacturing for domestic buyers fell by -25.9 per cent, while overseas orders were down -12.6 per cent. Exports accounted for 80.9 per cent of all cars, highlighting the need for free and frictionless trade.

“Twelve consecutive months of decline for UK car manufacturing is a serious concern and underlines yet again the importance of securing a Brexit deal quickly,” Hawes said. “The sector is facing multiple seismic challenges simultaneously: technological, environmental and economic. The ongoing political instability and uncertainty over our future overseas trade relationships, most notably with Europe, is not helping and, while the industry’s fundamentals remain strong, a brighter future is only possible if we secure a deal that can help us regain our reputation as an attractive location for automotive investment. No deal is not an option.”

Compared to May 2018 UK car production is down -21.0 per cent with 557,295 new models being produced, which is partly attributed to the decision by some manufacturers to bring forward summer shutdowns to April in anticipation of the expected March date for the UK to leave the EU.

Commenting on the latest figures, Stuart Apperley, director and head of UK automotive at Lloyds Bank Commercial Banking, said: “May’s production figures provide a clearer image of the sector’s wider health after April’s sharp dip, which was skewed by the brought-forward shutdowns.

“The sector’s particularly susceptible to issues facing the wider economy and has a number of headwinds of its own. Speculation around plant closures and production scale-backs are doing little to instil confidence among manufacturers.

“Many issues the sector faces – from uncertainty around future trading relationships through to negative publicity concerning diesel emissions – are affecting consumer confidence and subsequently hurting sales and, ultimately, manufacturers. Promisingly, the sector has proven itself resilient in the past, but more certainty is needed in the coming months.”

Earlier this week SMMT published it’s first UK Automotive Trade Report, charting the rise of the sector over 40 years and setting out recommendations to government and industry to help boost competitiveness, promote frictionless trade with existing markets and unlock new business. The report warns border delays resulting from a no deal Brexit could cost the UK automotive sector up to £50,000 per minute.