UK car industry investment slumps to half the amount announced this time last year as Brexit uncertainty bites
The Society of Motor Manufacturers and Traders (SMMT) said today that investment in Britain’s car industry has stalled – dipping by half compared to the same time last year.
The SMMT’s boss said there was no Brexit dividend for the UK automotive industry, particularly in what he described as “an increasingly hostile and protectionist global trading environment”.
For the first six months of 2017, investment in new models and factory improvements came in at £647.4m, but for this year, the figure was £347.3m.
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The industry reported record £82bn turnover last year, marking the eighth consecutive year of growth. But the SMMT said that was the result of long planned investments, and there was concern progress could be reversed with the lingering question mark over the future regulatory and customs relations with the EU.
The SMMT, which has been vocal in calling for clarity on Brexit negotiations to give businesses more awareness of what future awaits them, said that Brexit uncertainty was “thwarting investment”.
The industry body today called for more rapid progress to be made on Britain’s departure from the bloc, saying that as a minimum, a deal needed to maintain customs union membership and deliver Single Market benefits.
Jobs in the UK automotive manufacturing sector rose 2.8 per cent in 2017 to 186,000, while the sector’s economic contribution came in at £20.2bn.
The SMMT said the first six months of 2018 had not been so encouraging, with production output falling alongside a dip in demand among the new vehicle markets. It said that with decisions on new vehicle models in the UK due soon, the government needed to take steps to boost investor confidence.
Mike Hawes, the SMMT’s chief executive, said:
There is growing frustration in global boardrooms at the slow pace of negotiations. The current position, with conflicting messages and red lines goes directly against the interests of the UK automotive sector which has thrived on single market and customs union membership.
There is no credible ‘plan B’ for frictionless customs arrangements, nor is it realistic to expect that new trade deals can be agreed with the rest of the world that will replicate the immense value of trade with the EU. Government must rethink its position on the customs union.
There is no Brexit dividend for our industry, particularly in what is an increasingly hostile and protectionist global trading environment.
The government has said it is confident of securing a good deal with the EU that is “mutually beneficial”, permitting for free and frictionless trade with other countries in Europe.
The likes of Nissan, Toyota, BMW and Vauxhall have committed to investment in the UK, though BMW has recently warned if the supply chain will have a stop at the border than it will not be able to produce its products in the UK.
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