UK car industry warns of €55k/minute cost of hard Brexit

London – The Society of Motor Manufacturers and Traders (SMMT) has urged the next UK prime minister to secure a Brexit dealt for frictionless trade with the EU in order to avoid a “knockout blow” to the country’s automotive sector.

“Loss of automotive would force the UK out of Top 10 global exporter rankings behind Belgium, Mexico, Canada and Russia,” the society warned 25 June, as it published the first UK auto trade report.

In the case of a no-deal Brexit, the SMMT 2019 UK Automotive Trade Report warned that “delays to production caused by friction at the border could add up to £50,000 (€55,800) a minute for the sector.”

Leaving the EU without a deal, the report noted, would trigger “the most seismic shift in trading conditions ever experienced by automotive.”

“Delays to shipments of parts to production plants are measured in minutes, with every 60 seconds costing £50,000 in gross value added – amounting to some £70 million a day in the worst-case scenario,” the society added.

However, SMMT pointed out, a right deal, the right business environment and auto-friendly trade strategy could deliver a £20-billion boost to the industry.

In an address to the industry’s annual International Automotive Summit in London, Mike Hawes, SMMT chief executive, said, “no deal” remained a “clear and present danger” for the industry.

“The next PM’s first job in office must be to secure a deal… because, for our industry, ‘no deal’ is not an option and we don’t have the luxury of time,” he added.

The UK-EU automotive trade value rose 118% from £47 billion in 2009 to £101 billion last year.

Over the same period, car production increased by more than half, with more than eight in 10 vehicles bound for export.

The automotive industry is the UK’s "single biggest exporter of goods", trading with some 160 countries worldwide, and accounting for more than 14% of total exports, according to SMMT.

The UK Conservative Party is currently in a leadership race to elect the country's next prime minister.

The UK is set to leave the European Union at the end of October.