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Carmakers tell Boris: 'No-deal Brexit is simply not an option'

Edmund Heaphy
Finance and news reporter
New vehicles leaving a Honda plant in Swindon, England in February. Photo: Adrian Dennis/AFP/Getty Images

Calling it an “existential threat” to their industry, carmakers told prime minister Boris Johnson that “a no-deal Brexit is simply not an option” in a letter on Friday.

The letter, sent to the newly installed prime minister by the Society of Motor Manufacturers and Traders (SMMT), reminds Johnson that the car sector contributes £18.6bn to the UK economy and employs hundreds of thousands of workers.

“We cannot, however, continue to deliver these benefits, or take advantage of new opportunities, if the UK leaves the EU without a deal,” Mike Hawes, CEO of the SMMT, said.

The letter, ostensibly written to congratulate Johnson on his appointment as prime minister, lays bare the impact that crashing out of the EU would have on the car industry.

“We are highly integrated with Europe, and a no-deal Brexit would result in huge tariff costs and disruption that would threaten production, as well as further undermining international investors’ confidence in the UK,” Hawes wrote.

“We need a deal with the EU that secures frictionless and tariff free trade. No-deal Brexit is simply not an option.”

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Noting that Johnson assumed office at a “moment of dramatic and exciting change” for the car sector, Hawes asked him to ensure the government’s industrial strategy delivers “the greatest benefits to our industry and the UK as a whole.”

The warning from the SMMT comes during a tumultuous time for the UK car industry.

New car production dropped by almost half in April, with several carmakers planning factory shutdowns to coincide with 29 March, the date the UK was first meant to leave the EU.

In June, Ford announced that it was closing its plant in Wales, leading to the loss of up to 1,700 jobs.

That followed similar announcements from Honda, which is closing its Swindon plant in 2021, and Nissan, which abandoned plans to manufacture its flagship X-Trail SUV vehicle at its Sunderland plant.

While experts have pointed to the impact of Brexit, Ford’s top executive in Europe insisted that its decision to close its Bridgend engine plant after more than four decades had nothing to do with it.

And though Jaguar Land Rover said in January that a substantial proportion of 4,500 worldwide job losses would come from its UK workforce, it said earlier in July that it was investing hundreds of millions of pounds in electric vehicle production at its Castle Bromwich plant in Birmingham.