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.
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.”