Brexit and issues surrounding any future No Deal Brexit have dominated UK headlines for months, and one of the latest warnings about the future of manufacturing in the UK related to the car sector.
The Society of Motor Manufacturers and Traders which represents the entire vehicle sector in the UK issued a bleak update on Brexit on 29 November, which is unlike to provide solace to workers within the trade or public bodies.
British Car Sector Warning
In a statement, the Society said that there would be far fewer cars produced within British manufacturing over the next five years if the sector had to follow WTO (World Trade Organisation) rules.
The WTO fall back could be a result of a no deal or the default position the UK adopts at the end of the Brexit transition period.
They said that research had indicated that around £3.2bn could be added to British manufacturing costs as a result of tariffs, making production virtually unviable.
Output Drop
The statement also added that global manufacturers moving production elsewhere and a fall in demand could mean the total manufacturing output for the sector drops to around 1mn annually.
At present, there are 1.3mn vehicles produced in the UK and this figure had risen consistently in the years prior to the EU Referendum in 2016.
At that time there were about 1.7mn cars produced and forecasts for 2mn by 2020 were being batted around by analysts.
Huge Costs
The Society went on to warn that cumulative costs of Brexit under WTO rules would amount to £42.7bn by the year 2024, meaning several thousand jobs in the sector would be at risk.
At present, there are 168,000 workers in the UK car manufacturing sector.
As a result, the statement concluded by calling for: “an ambitious deal that eliminates tariffs, delivers frictionless trade, maintains regulatory alignment and secures access to talent from right across the globe“.
George Gillespie is the President of the Society and he urged all political parties to work with the sector, saying:
“Uncertainty over Brexit and future trade has cost us dearly. We have all spent millions on no-deal preparations – not once, not twice, but three times. Wasted millions that could, should have been spent on research, on development, on design.“