CEO Update

‘No deal’ must be ruled out immediately and permanently

01 March 2019 #CEO Update

UK car manufacturing figures were published this week, showing an -18.2% decline for production in January. It’s hugely concerning that we’ve now seen eight successive months of decline, in part due to falling domestic demand for cars, but worryingly we’re seeing a significant drop in models built for export to specific markets, notably China.

Clearly the global automotive industry is facing a number of challenges at the moment – stalling economic growth in key international markets, escalating trade tensions and the fight to stay at the front of future technology development. The self-inflicted chaos of a ‘no deal’ Brexit shouldn’t be thrown needlessly into the mix at such a delicate time. We’re already seeing that ‘no deal’ preparations are monopolising time and resources for UK companies, undermining our competitiveness when efforts should be focused elsewhere. Following the dark days for British car making in the seventies and eighties, regaining global competitiveness has taken decades of hard work, inward investment and collaboration across national borders. It can easily be lost again.

Late last year, we surveyed our members on the impact of Brexit and almost a third who responded said that they had already postponed or cancelled UK investment decisions because of our departure from the EU. One in five said that they had already lost business as a direct consequence. Were companies to answer the same questions now, the numbers would surely paint a stark picture of the challenge we are all facing. Businesses are having to make extremely tough decisions about the future, and with ongoing uncertainty over the coming months, it’s easy to foresee which way the balance will tip.

UK Automotive needs stability and security if it is to remain successful in this changing landscape. While we welcome the moves in parliament to prevent a ‘no deal’ Brexit on 29 March, without meaningful progress on passing a deal that safeguards frictionless trade with our biggest trading partner, the EU, we’re simply deferring a ‘no deal’ cliff edge a matter of months and facing the same uncertainty down the road. Every day a ‘no deal’ Brexit remains a possibility is another day automotive companies pay the price in additional and potentially pointless costs. ‘No deal’ must be taken off the table immediately and permanently.


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