London: Investment in Britain’s key automotive sector collapsed by almost half in the first six months of the year owing to Brexit uncertainty, industry data showed on Tuesday.
The Society of Motor Manufacturers and Traders said car investment plunged to £347.3 million ($461 million, 395 million euros) in the first six months of 2018, compared with £647.4 million in the same part of 2017.
The organisation warned that new investment projects were being hindered by uncertainty over the government’s tough Brexit negotiations with Brussels.
“That’s the cost of uncertainty, the price we pay for slow decision making,” SMMT chief executive Mike Hawes told a press conference.
“The (UK) government has set red lines on leaving the single market and the customs union. These red lines go directly against the interests of automotive.”
Hawes added: “If we cannot cut through this current fog of uncertainty there will start to be real casualties.”
The UK car industry employs 856,000 people and exported 1.33 million cars last year, according to the SMMT.
Addressing Tuesday’s conference, BMW’s UK head Ian Robertson dismissed suggestions that the German car giant would move UK production abroad owing to Brexit uncertainty.
However he stressed that the group did not want to see delays to its European supply base, or car parts arriving into the UK from the continent.
“If we do, then we will clearly have to make investments to overcome some of it and that makes the industry less competitive,” Robertson said.
“Those could be delays which ultimately end in production being slowed for hours or maybe even days at a time.”
British Prime Minister Theresa May is about to enter into the next round of negotiations with EU counterparts, but her team is still to define exactly what it wants from Britain’s future relationship with the continent, particularly in the area of customs regulation.
“Leaving the single market and customs union will bring an end to the seamless movement of goods that UK Automotive relies upon, with more than 1,100 trucks from the EU bringing components to car and engine plants every day,” the SMMT said on Tuesday.
“Without the customs union and the regulatory alignment of the single market, there would be disruption at the border undermining the competitiveness of the sector,” it added.
This post was last modified on June 27, 2018, 8:31 pm