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Brexit could cripple UK auto industry

Posted on 20 June, 2017

Senior executives have warned that the British automotive industry could be permanently damaged if an interim deal isn’t met when Britain withdraws from the EU. The industry, which employs over 800,000 people in the sector, is set to reach a record output in 2020 in its production of vehicles such as Jaguar Land Rover, Nissan and MINI. "The greatest threat to that progress is Brexit," Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT) told Reuters. "To leave in 2019 without a deal would put the industry in peril, defaulting to WTO tariffs and customs barriers would damage our industry permanently." The automotive sector has repeatedly warned lawmakers that tariffs and constrained access to its biggest export market following Britain’s withdrawal from the EU could threaten the future of huge car factories in the country. British prime minister Theresa May has proposed a clean break from the single market of the EU, which maintains free trade across all member states, in favour of a special deal. However, any delay at the border would be hugely damaging for manufacturing operations in England. Only 44 per cent of vehicle parts in the UK come from Britain. "Put very simply the supply chain will start to seize up with obvious impacts on our ability to manufacture vehicles efficiently," Honda Europe senior vice president Ian Howells told Reuters. Honda manufactures eight per cent of the 1.7 million cars produced in Britain last year.