Britain’s membership and involvement in the EU is critical to the success of the country’s automotive industry, a new independent report commissioned by the Society of Motor Manufacturers and Traders has found.
The KPMG study – The UK Automotive Industry and the EU – says the UK has to maintain a strong voice in Europe to support the sector.
It says membership of the EU is vital for inward investment, growth of the sector and job creation. Access to a single market, integrated supply chains, funding, free movement of labour and the ability to influence technical regulations and product standards are the key benefits identified by KPMG.
A survey of SMMT members also found that 92% thought remaining in the EU would be best for business, while 70% believe a withdrawal from the union would have a negative impact on their business.
SMMT Chief Executive Mike Hawes said, “The position of the UK automotive industry is clear – being part of a strong Europe is critical for future success.
“This report, and our member survey, shows that Britain’s EU membership is fundamental to investment, growth and jobs in automotive companies of all sizes.
“The recent success of the sector is due to its global competitiveness; competitiveness that is enhanced by a supportive business environment at home and access to the huge single market.
“If we are to maintain this position and increase access to growing global markets, the UK must play a key role in shaping EU policies, budgets and regulations.”
However, reform is still needed to remove the burdens placed on industry by EU regulations, the report also says, with complexity bringing with it the potential to undermine international competitiveness.
John Leech, Head of Automotive at KPMG, said, “Our report show just how important the EU is to the UK automotive market – it is a highly globalised industry and integrated within the EU.
“This integration gives global manufacturers with facilities in the UK, for example, access to European consumers. Our analysis shows that, for the automotive industry, it is not a question of the EU versus emerging markets; they want to do business with both.”
The automotive sector supports 700,000 jobs in the UK, has a £60 billion turnover and adds £12 billion in value to the UK economy through 30 manufacturers and around 2,500 component suppliers.
