SMMT chief says the automotive industry can expect ‘uncertainty’ and ‘instability’ following the EU vote
According to the Society of Motor Manufacturers and Traders (SMMT), the automotive industry will now face a period of difficult “economic instability” following the decision of the British people to leave the European Union.
The SMMT says that the automotive industry turnover reached £71.6 billion in 2015; an increase of 7.1% to make last year a very successful one for the British vehicle industry.
SMMT chief executive, Mike Hawes, said that the industry had “gone from strength to strength” in recent years, but that this growth had now been threatened by the ‘uncertainty’ surrounding the post-EU referendum vote.
Auto manufacturers and the SMMT are now left questioning what the impacts of a Brexit will be on production and costs, as no one is yet sure what will happen surrounding the current single market of which the UK is a member.
The single market allows the UK access to tariff-free trade and movement between EU member countries and single market partners, which includes the USA and Japan.
Many companies involved in the automotive industry are concerned that this tariff-free trade and movement will come to an end in a couple of years, when the UK does leave the EU, resulting in bigger export costs.
Mike Hawes believes the UK’s recent success in the automotive sector is as a result of the access to the single market, the EU’s legislation and the convenience of employing talent from EU member countries.
In a speech following June’s vote, Mr Hawes said: “As a result (of the Leave victory), the industry now faces new challenges. Uncertainty, economic instability and an undoubted impact in terms of cost, influence and ease of business.”
However, some automotive leaders, including Jaguar Land Rover strategy director, Adrian Hallmark, who believes the UK will cut a beneficial deal with the EU, as “it’s in the(ir) interest to maintain access to the UK market”, especially for the luxury auto sector.
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