The automotive sector could face production losses of £55.4bn by 2025 under a no-deal Brexit, according to a statement from Society of Motor Manufacturers and Trade (SMMT).

Attributable to WTO tariffs, the major losses will only add fuel to fire, as the entire European and UK sector has already lost £89m due to coronavirus.

Subsequently, the SMMT have made a final plea for negotiators to leave no stone unturned in efforts to secure a deal by Christmas that avoids tariffs.

Speaking at an online event, SMMT president and executive chairman HORIBA MIRA George Gillespie, said: “We need a future trading relationship that works for automotive. We’ve already spent nigh on a billion pounds preparing for the unknown of Brexit and lost twenty-eight times that to Covid. Let us not also be left counting the cost of tariffs, especially not by accident.”

According to insights from the SMMT, the sector should also anticipate a drop in vehicle production by two million across the next five years, whilst annual production is expected to consistently fall below one million units.

Even with a bare-minimum trade deal, the cost to the industry could reach £14.1bn. With little time for businesses to prepare for new trading terms, hasty communication of a deal has been encouraged in order to limit damage to the sector and its workers.

Issues going green

Calling for a deal that sustains competitiveness and keeps the UK at the forefront of the global green transition, Gillespie continued: “Industry can deliver the jobs growth we need and help rebuild a devasted economy, but government must work with us to create the environment for this success.

“That starts with a favourable Brexit deal and a bold strategy to help transform automotive production in the UK, attract new investment, upskill our workforce and build world-leading battery capability to future-proof our manufacturing. When Covid lifts, we need to be ready; ready to support government to engineer an economic – and green – recovery.”

A no-deal Brexit would significantly hamper the UK’s ability to establish a strong ecosystem for EV production, the SMMT added; a consequence aggravated by the government’s recent decision to bring the ICE-vehicle ban forward to 2030.

Mike Hawes, chief executive of SMMT, believes the green transition represents an immense challenge, as the competitiveness and employment to achieve green growth “hangs in the balance”. Referring to the ICE ban, Hawes added: “To complete the job in under a decade is no easy task. And with showrooms closed, choking factories of orders, the ability of the sector to invest further is severely constrained.”

The stakes are high – automotive represents one of Europe’s most valuable manufacturing industries, supporting around 180,000 manufacturing jobs.

The sector, worth £78.9bn, exports more goods than any other UK industry and provides an annual £15.3bn in added value every year to the UK economy, while investing £3.73bn in R&D.