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Political uncertainty stalls UK car production

28 November 2019
Jonathan Moss, Head of Transport at DWF comments on the SMMT UK car production figures for October 2019.

This 4% fall in UK car production last month stems from a fear among manufacturers of a post-Brexit imposition of a 10% tariff on exports under World Trade Organisation terms. This would have an adverse impact on manufacturing costs (both in terms of imported car components and exported cars), rendering manufacturers considerably less competitive than their foreign counterparts.  This is further compounded by the SMMT warning earlier this week that a no-deal Brexit would cost the UK car industry £40bn by 2024.

In anticipation of possible post-Brexit disruptions, global firms – including Toyota, BMW and Jaguar Land Rover - have already shut down production lines. Nissan – which supports 30,000 jobs in Britain - went even further to state that a no-deal Brexit would jeopardise Nissan's entire European business model. The potential effects of a decline in the automotive sector in the UK are wide-reaching and indeed, in April this year, the unseasonal fall in car output pushed down UK GDP by 0.2 percentage points.

As such, to remain competitive, it is crucial that we curb this industry decline through our political leaders securing a close trading relationship on any departure from the EU.

 

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