CEO Update

Why the government should take ‘No Deal’ Brexit off the table

21 December 2018 #CEO Update

Manufacturing figures for November were released this week, showing a significant -19.6% drop in UK production compared with the same month last year, driven primarily by a reduction in cars built for export abroad but exacerbated by declining consumer and business confidence at home.

It’s extremely concerning to see output of UK built cars decline so much in the month, with production seriously impacted by falling demand as well as regulatory, model and technology changes.

It again goes to show that thousands of jobs in British car factories and supply chains depend on free and frictionless trade with export markets especially the EU – if the country falls off a cliff-edge next March the consequences would be devastating.

With fewer than 100 days until the UK leaves the European Union, the government’s ‘No Deal’ preparations are being ramped up, but the automotive industry needs certainty and a ‘No Deal’ Brexit must be ruled out.

Brexit is already having an impact – in output, costs and jobs. But this does not compare with the catastrophic consequences of leaving the EU without a deal. The Just-in-Time nature of automotive means the impact of ‘No Deal’ will be felt, not in months or days, but in hours.

We would face immediate delivery shortages, additional costs and uncertainty, which would seriously damage our sector. Both government and parliament have a responsibility to take this option off the table or risk destroying a vital industry, and we urge all politicians to reflect carefully on the decisions that lie ahead in the New Year.

Of course, as the year draws to a close, it’s a time for us all to take stock and, hopefully, look forward to what lies ahead after a tumultuous 12 months. We hope that you enjoy a pleasant and refreshing break and everyone at SMMT wishes you a merry Christmas and all the best for the New Year. Update will return to your inbox on 11 January and we look forward to working with you in 2019.

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