The Society of Motor Manufacturers and Traders (SMMT) is urging MPs to vote in favour of the Prime Minister’s Brexit deal in order to ‘take no deal off the table’.
MPs are due to vote on Theresa May’s Brexit plans from 7pm tonight.
The immediate impact of a no deal Brexit on the automotive industry would create problems around the supply of parts and vehicles in and out of the UK. This would in turn create supply problems for dealerships across the UK, particularly in the industry's most important plate-change month of March, where retailers make the majority of their profit for the year.
Mike Hawes, SMMT chief executive, said: “As MPs prepare to vote on the Government’s Brexit deal, we urge them to remember they hold the future of the British automotive industry – and the hundreds and thousands of jobs it supports – in their hands.
“Brexit is already causing us damage - in output, costs and jobs, but this does not compare with the catastrophic consequences of being cut adrift from our biggest trading partner overnight.
“The Just-in-Time nature of automotive means the impact of ‘no deal’ will be felt, not in months or weeks, but hours.”
Hawes said manufacturers would face immediate delivery shortages, disruption, additional costs and uncertainty in the event of no deal.
He said: “Both the Government and parliament have a responsibility to take ‘no deal’ off the table or risk destroying this vital UK industry.”
Nigel Driffield, Professor of International Business at Warwick Business School, said it was widely expected by business that the Commons will reject the Prime Minister’s deal tonight.
Driffield said: “Most political commentators are suggesting that the only outcome of this will be to extend Article 50.
“For businesses who are seeking clarity and a basis to form investment decisions, this is far from ideal. It will force many companies to delay investing and creating jobs until they know what will happen next.
"It is difficult to see how the outcome of this political impasse is anything other that either the government forcing through “no deal” in march, or there being a “peoples vote” – with the possibility of remain.
“While many businesses may favour remain, most would rather the possibility of “no deal” were removed altogether.”
Driffield said businesses need certainty over trading schedules, in terms of both tariff and non-tariff barriers and other associated frictions.