The Society of Motor Manufacturers and Traders has issued a stern warning against a hard Brexit, suggesting border delays alone could cost the sector £50,000 a minute.
The prediction was published as part of the trade body’s report into the car industry – the country’s single biggest exporter of goods.
It warned that shipments of parts to manufacturing plants are measured in minutes and could add up to £70m a day in costs, before factoring in WTO tariffs, a combination which would see ‘a knockout blow to the sector’s competitiveness’.
SMMT chief executive Mike Hawes said in a speech on Tuesday that: “No deal remains the clear and present danger.
“The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, no deal is not an option.”
The trade body’s report elaborated further: “The UK might cease to be a party to all EU preferential trade agreements unless the UK government successfully replicates the effects of these treaties on exit day.
“The replication of complex trade agreements requires time, and the UK is unlikely to preserve preferential treatment with several key trading partners unless a transitional period maintaining the status quo is secured in negotiations with the EU.
“More than 16 per cent of UK cars are destined to preferential trading partners. Some of them are among the world’s fastest-growing markets for UK car exports.”
Any further delays or tariff costs for the sector would be a significant blow as consumer spending on new vehicles continues to slide. The latest CBI survey showed how sales volumes this month have registered the steepest decline in seven years.
Read more: UK car production down for national and global markets as manufacturers take early summer break
However, drive to deliver a deal is evident on the continent with the German ambassador to the UK, Peter Wittig, confirming at the same conference that he’s determined to forge an agreement – if a solution for the Irish border backstop can be found.
He commented that: “My country is ready to talk and the chancellor [Angela Merkel] once said she would be willing to talk to the last hour not to have a no-deal scenario.
“It’s a mindset. We are not giving up in achieving an orderly Brexit. Germany has been a very pragmatic voice in this whole tortuous Brexit process and we will continue to be that.
“Even if we have a short window while the new prime minister is in place, we will welcome any idea how to solve that famous backstop issue and we will be willing to work towards a negotiated deal which is long term the only viable and sensible option for Europe.”
The value of goods exports has increased once again across all four regions of the UK as demand for British products continues to grow overseas.
Through the 2018/19 financial year, Scotland recorded the highest growth, whilst Wales and Northern Ireland also returned strong international trade increases. England continues to deliver the highest trade value with nearly £252 billion in export sales from goods.
- England | +3% to £251.9bn
- Scotland | +12.9% to £32.8bn
- Wales | +7.5% to £17.7bn
- Northern Ireland | +4.4% to £9bn
The number of exporting companies also grew by over 5,000 to 110,831 in the first quarter of the year compared to Q1 2018 – a new record.
International Trade Secretary Liam Fox commented on the latest HMRC figures that: “Whether it is an exporter in rural Derbyshire or the Scottish Highlands, people and businesses across the world want to get their hands on British goods at unprecedented levels.
“The data released today pays homage to the hard work of people working in British businesses up and down the United Kingdom, who are now exporting their goods on unprecedented scales.
“I am delighted that exports continue to grow in every part of the UK, this shows we are working for every corner of our country and are not led by one region alone.”
Continued demands and goods sales from British companies overseas defeats some predictions that foresaw an international sales slowdown from UK firms following the EU referendum result.
Yet, with the latest Brexit deadline of 31st October approaching, and the next two candidates to become the next Prime Minister openly backing a no deal exit should no agreement be reached for the UK’s departure, demand for British goods and the number of exporting local companies has never been higher.
Read more: Scottish food & drink exports rise to record £1.4bn
However, many companies have invested millions of potential growth investment into preparing for a no deal Brexit already in goods stockpiling and in some instances, upping sticks to create new bases on the continent.
To continue export success it’s critical that all businesses that trade with the EU or rely on stock and components from within the single market are ready for whatever Brexit outcome on what seems to be an increasingly more certain 31st October deadline.
If your firm has only recently begun exporting or are yet to begin or finale Brexit strategy, see how Go Exporting can help audit your Brexit readiness here.
