Photographer: Chris Ratcliffe/Bloomberg

U.K. Carmakers Warn That Hard Brexit Risks Decades of Progress

Updated on
  • Industry group president: Competitiveness ‘can be easily lost’
  • WTO tariffs alone would add $6 billion to automakers’ costs

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The U.K.’s auto industry body issued a stark warning to the government’s business minister that introducing friction to trade with the European Union could undo decades of work spent honing world-class manufacturing.

“Competitiveness comes hard won; it can be easily lost,” Society of Motor Manufacturers and Traders President Tony Walker said at the lobby group’s annual dinner in London on Tuesday, where Greg Clark, the secretary of state for business, energy and industrial strategy, also spoke. “A hard Brexit would undermine all that we have collectively achieved.”

Carmakers worry that new custom checks, tariffs and logistical challenges could undermine their market advantages. They say time is running out: Earlier this month, Honda warned it needs clarity on transition plans by March because of the long lead times needed to prepare.

“We need to see concrete progress, and quickly,” Walker said to assembled industry representatives. In the last 40 years, “we have torn down so many barriers. Please don’t allow new ones to be erected.”

World Trade Association tariffs would add at least 4.5 billion pounds ($6 billion) to the industry’s annual costs, the SMMT said in a statement Tuesday. More than 1,100 trucks deliver auto-vehicle parts to U.K. factories every day and currently benefit from free passage across borders.

Walker’s comments come as U.K. Prime Minister Theresa May seeks cabinet support ahead of crucial meetings with EU counterparts before the end of the year. Negotiators reached an agreement in principle on the financial settlement the U.K. will pay when it leaves the bloc, the Telegraph reported on Tuesday. That clears one major obstacle to talks on trade that will define the country’s long-term relationship with the EU.

Sluggish negotiations have already hurt the sector, Walker said. “We have huge challenges,” he said. “Consumer confidence has fallen, leading to a downturn in sales. Uncertainty about Brexit -- and market confusion over diesel -- are taking their toll.”

The mood drove the SMMT Chief Executive Officer Mike Hawes to a dose of black humor. “Everything is going so swimmingly,” he joked in a separate speech.

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