UK vehicle manufacturers face a likely £3.2 billion annual increase in costs from WTO tariffs on imported parts and exported vehicles if the UK leaves the European Union without a “world-beating” trade deal, says the SMMT.
And it predicts a drop in vehicle production by 1m units by 2024 if there is no deal.
It has urged all political parties to put the UK’s automotive sector at the heart of their economic and trade policies.
“UK Automotive’s needs are clear: frictionless trade free of tariffs, with regulatory alignment and continued access to talent,” said SMMT chief executive Mike Hawes.
“Rather than producing two million cars a year by 2020, a no trade deal, WTO tariff worst case scenario could see us making just a million. The next government must deliver the ambition, the competitive business environment and the commitment needed to keep automotive in Britain.”
George Gillespie, SMMT president, said the industry has spent millions on ‘no deal’ preparation – not once, not twice, but three times.
He said it was “wasted millions” that should have been spent on research and development.
“We have in the past invested our resources not only in our technology and facilities but also in our people. In skills to fulfil our ambitions.
“But look at what uncertainty is doing to investment. Before the referendum it averaged £2.5 billion per year.
“Until recent new announcements, that figure had fallen from £2.5 billion to a paltry £90 million in the first half of this year.
“£90 million across every UK manufacturer is barely enough to keep our existing plants operational.
“That could be a predictor of our manufacturing sector’s fate in 3 to 5 years,” said Gillespie.