‘£50,000 a minute’: devastating predicted cost of no-deal Brexit for automotive sector

Border delays triggered by a ‘no-deal’ Brexit could cost the UK automotive sector a staggering £50,000 per minute, an industry report has claimed – equivalent to £3m every hour or £72m each day.

Combined with World Trade Organisation tariffs, which amount to £4.5bn every year, the delays “would deliver a knockout blow to the sector’s competitiveness, undermining a decade of extraordinary growth,” said the Society of Motor Manufacturers and Traders (SMMT).

The end of borderless trade could cripple the sector’s “just-in-time” operating model, the trade organisation said as it launched its first ever UK Automotive Trade Report, subtitled "Insights from an international trade hub at the heart of Europe."

“Automotive matters to UK trade and to the economy, and this report shows that, if the right choices are made, a bright future is possible,” said SMMT chief executive Mike Hawes. “However, no-deal remains the clear and present danger. We are already seeing the consequences of uncertainty, the fear of no-deal. The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, no-deal is not an option and we don’t have the luxury of time.”

The automotive sector is the UK’s biggest exporter of goods, trading with about 160 countries and accounting for more than 14% of total exports. It employs 168,000 people.

Leaving the EU without a deal could have a negative effect on consumer choice and affordability, the SMMT said. It made eight recommendations for government and industry, including: “ensure no new barriers are introduced to trade between the UK and EU, as well as maintaining existing trade terms for preferential access to major markets beyond the European regions,”; “remain at the forefront of global automotive rule making,”; and “foster trade promotion by helping UK companies to explore distant and risky markets.”

Despite the gloomy no-deal outlook, the body said the “right deal” could deliver a £20bn boost to the sector if combined with a competitive business environment and “auto-friendly” trade strategy.