Car manufacturers from across the country are concerned that they’ll need to halt production in the event of a ‘no deal’ Brexit. A lack of appropriate guarantees from Brussels could lead to shortages of vital vehicle components and shut-off export markets. Car production has already fallen by 3.3% this year, itself a product of a 47.2% drop in demand for UK-made cars.
Mike Hawes, the Chief Executive of The Society of Motor Manufacturers and Traders, said “If there’s no deal, then there’s no implementation period, and that kicks in in just under eight months. If you can’t get the parts in, then you can’t make the finished vehicle, it will come to a halt. No deal is just not an option.” He went on to suggest that production plants simply weren’t ready for Brexit, but that they’d strive to keep the production lines rolling.
The industry’s concerns centre around changes to import and export rules. Production lines are reliant on exceptionally tight delivery windows. A number of car manufacturers are already preparing for a worst-case scenario by training supply chain staff in dealing with the challenges of new and more frequent custom checks.
As it stands, more than half of all the parts and components used by the British car manufacturing industry are imported from overseas. Around 80% of the cars produced in the country are exported, with 50% of these being sold in EU member states.
In June alone, the production of cars for the home-market dropped by a staggering 47%. However, the SMMT has attributed this to a ‘perfect storm’ of conditions including new emissions tests and the shift towards new models. Releasing a statement, Mr Hawes said that the statistics were from a “one month anomaly” and that it “demonstrate the risks of judging automotive performance one month in isolation, with numerous and varied factors creating a perfect storm for home market output”.
Statistics compiled by the SMMT have demonstrated that the UK is currently more dependent on car imports than it’s been in any other period. It’s little surprise, then, that many car manufacturers of all sizes want a deal with Brussels as soon as possible.
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