The latest SMMT Member Brexit Survey finds a third of the auto industry is already cutting jobs in anticipation of the end of free and frictionless trade. Anna Tobin reports
The SMMT Member Brexit Survey shows that fears of a No Deal Brexit are escalating in the UK automotive sector, with a third of UK automotive businesses reporting cutting jobs, this is up from an eighth when the survey was last carried out in November 2018. While 80.3% are concerned that leaving the EU without a deal will have negative consequences for their future prospects, this is up from 74.1% in November 2018. Nearly 80% (79.6%) are worried about the impact on their profitability and 62.2% say a No Deal Brexit will impact their ability to win overseas business.
Auto sector preparations for Brexit
The Society of Motor Manufacturers and Traders (SMMT) SMMT Member Brexit Survey survey found that 11.8% of firms have already divested from their UK-based operations and 13.4% are relocating operations overseas. The majority of those surveyed (73.2%) are actively preparing for post-Brexit disruption. Almost half have spent money on stockpiling and warehousing to mitigate against the risk of border delays and production stoppage and a third have made adjustments to logistics and shipping routes.
“As the Brexit clock ticks ever closer to midnight, this survey reveals the bleak future that awaits this vital sector in the event of ‘no deal,’ warns Mike Hawes, SMMT chief executive. “Damage has already been done: investment is haemorrhaging, competitiveness being undermined, UK jobs cut and vast sums wasted on the impossibility of preparing for ‘no deal.’ Make no mistake, every day ‘no deal’ remains a possibility is another day of lost investment, another day that makes it harder to recover investor confidence in the UK.
“As yet, the damage is not irreversible. But we need a deal. A deal that, in the short term, enables a “business as usual” transition for as long as it takes to negotiate and implement the future trading relationship. In the longer term, that deal must replicate all of the benefits we currently enjoy which means an ambitious deal that delivers free and frictionless trade. UK jobs, innovation, trading strength and economic growth all depend on the automotive sector so we urge all parties to get a good deal done before it is too late.”