UK car industry sounds ‘red alert’ over no-deal Brexit damage

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The UK car industry says it has sounded a “red alert”, as production and investment tumble in the run-up to a possible no-deal Brexit.

The Society of Motor Manufacturers and Traders (SMMT) reported that vehicle output from UK plants fell to a five-year low of just over 1.5 million vehicles in 2018.

Investment, the industry body said, “stalled” at almost £590m over the 12 months.

It said the sum was 50% down on 2017.

The SMMT released the figures as carmakers face battles on many fronts – with the future of diesel-powered cars in sharp focus amid a collapse in demand and the global economic slowdown, particularly in China, also among the headwinds.

The UK’s departure from the EU has been uppermost on the industry’s mind since the referendum campaign began.

:: Airbus helps ministers ‘make clear’ impact of no deal Brexit

The SMMT has consistently argued that the prospect of new trade tariffs and supply chain disruption would make the industry uncompetitive abroad.

Eight in 10 cars made in Britain are currently shipped overseas.

The SMMT claims two-thirds of the industry’s foreign sales would be at risk under a hard Brexit, leaving scores of jobs under threat among the UK’s directly employed workforce of 186,000.

Its chief executive, Mike Hawes, said: “With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK automotive is on red alert.

“Brexit uncertainty has already done enormous damage to output, investment and jobs.

“Yet this is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the EU but with the many other global markets with which we currently trade freely.

“Given the global headwinds, the challenges to the sector are immense.

“Brexit is the clear and present danger and, with thousands of jobs on the line, we urge all parties to do whatever it takes to save us from no deal.”

The government responded: “As we leave the European Union we will seek the broadest and deepest possible agreement that delivers the maximum possible benefits for both the UK and EU economies and maintains the strength of our world-leading automotive sector.

“The automotive industry is a great UK success story, one we are working to grow through our modern Industrial Strategy, Automotive Sector Deal and research funding including millions for the creation of next generation batteries.”

The decline in UK car manufacturing marked the second successive year of falling output.

While Brexit jitters can partly explain the reverse gear, so too can the industry’s exposure to diesel powertrains.

It has continued to fight for the fuel to be part of the mix as the global car sector makes more of a push towards hybrids and electric cars in the wake of the so-called “dieselgate” scandal at Volkswagen.

The SMMT said production of diesel cars was down 22% to 561,000 last year.

It has blamed “confusion” among the car-buying public for diesel car sales plunging – last noted at almost 30% – amid car tax rises for new diesel vehicles and government threats surrounding their future.

The SMMT has protested that the latest diesel engines are far cleaner and, by choosing them over traditional petrol, they help balance rising CO2 emissions.

Jaguar Land Rover – the largest manufacturer in the UK and major producer of diesel-powered vehicles – has announced plans to cut thousands of jobs in a bid to save costs.

It, like rivals, has separately confirmed a series of Brexit contingency plans including temporary production shutdowns.

(c) Sky News 2019: UK car industry sounds ‘red alert’ over no-deal Brexit damage

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