Three quarters of UK auto companies fear no-deal Brexit

November 28, 2018 10:54 CET

LONDON — Three quarters of businesses in Britain’s automotive sector think leaving the European Union next year without a transition deal would hurt them, according to an industry survey from Britain’s Society of Motor Manufacturers and Traders (SMMT).

The SMMT, which opposed Brexit, said 74 percent of its members thought a no-deal Brexit would hurt their business versus 9 percent who saw benefits.

More than one in 10 companies had moved jobs abroad and a similar proportion had cut British staff as part of preparations for Brexit, the SMMT added.

The findings from the SMMT come on the eve of reports due from government economists and the Bank of England on the likely economic impact of leaving the EU.

“Crashing out of the EU would have immediate and devastating impacts, with border chaos disrupting the ‘just in time’ basis on which our business depends,” said Tony Walker, SMMT president and Toyota’s managing director for Europe.

Prime Minister Theresa May faces an uphill battle to persuade lawmakers to back her plans for Brexit in four months’ time, which involve a transitional deal which preserves the economic status quo for two to three years pending a trade deal that is likely to restrict British companies’ access to EU markets.

Some lawmakers in her Conservative Party instead favor leaving the EU with no transition and relying solely on more limited trade access under World Trade Organization rules – something opposed by automakers.

Walker said WTO rules could lead to months of delays importing parts, and that jobs would go without tariff-free access to EU markets.

Around four out of every five cars built in Britain are made for export, with the bulk going to the EU.

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