CEO Update

Future on a knife edge

22 March 2019 #CEO Update

Chaos or cataclysm? Roughly three years since the UK voted to leave the EU, parliament and the country is as divided as ever. Our scheduled date of departure may have moved (although not yet legally), but in shifting it potentially just two weeks down the track, the threat of no deal has not. The industry’s future remains on a knife-edge.

It’s staggering that we still await clarity on our future trading and political relationships. From the Prime Minister’s deal to crashing out without a deal, from ‘managed no deal’ to the revocation of Article 50 (a petition for which gained over two million signatures in 24 hours this week),  all options have their backers and, dangerously, all are still on the table.

The risk of leaving with no deal is higher than ever. Make no mistake, crashing out of the EU without a deal would trigger the most seismic shift in trading conditions that UK Automotive has ever experienced.

Overnight our sector would be hit by an immediate end to free and frictionless trade with its biggest market, an end to preferential trade with a further 70 countries worldwide, the imposition of billions of pounds of tariffs and severe disruption to supply chains and production. The damage to our sector could be irreparable with our competitiveness lost and reputation as an attractive and stable investment destination – already undermined – torpedoed.

The frustration is that industry should not be in this situation, having to dedicate scare time and precious resource to executing contingency plans, working out how best to survive in the event of a disorderly exit. We should be focused on realising the exciting future; developing zero and low emission vehicles, connected and autonomous technologies, digitised manufacturing; innovating new mobility solutions.

The global automotive industry will not stop for Brexit. It is facing perhaps the most significant change since the invention of the car. We have to plan and invest here in the UK else the development and deployment of the next generation of mobility solutions will occur elsewhere.

Government must play its part, too, despite the current uncertainty. It was pleasing, therefore, that the Department for Transport this week launched its ‘Future of mobility: urban strategy’. It offers important guidance on the objectives and principles underpinning the future of mobility in towns and cities, while giving industry scope to invest and innovate, developing exciting new services.

We will work closely with government and local authorities to shape the Strategy’s implementation, helping to position the UK as a global leader in future mobility.

Continuing this theme, SMMT Connected 2019 takes place on 4 April at the QE2 centre in Westminster. This, the third iteration, promises to be the best event yet, with a packed agenda and tickets are still available here.

Of course whether we have left Europe – and on what terms – by the time of SMMT Connected is unclear.

Business anxiety is at fever pitch. There is too much on the line to get this wrong and leaving without a deal would be catastrophic. We need sensibility to prevail.

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