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UK car industry warns Brexit cliff edge could permanently damage sector

The survey by the Automotive Council found cars being built in Britain are becoming more British

The UK must secure access to the European single market and customs union through a transitional deal to stop the automotive sector falling off a "cliff edge" following the Brexit negotiations, the Society of Motor Manufacturers and Traders has said.

Carmakers have called on ministers to keep the United Kingdom in the EU single market and customs union for at least five years or risk permanent damage to the industry.

It said that any new relationship will need to address tariff and non-tariff barriers, regulatory and labor issues, all of which will take time to negotiate. Otherwise Britain could face a "cliff-edge" in 20 months that would be the "worst foreseeable outcome for the sector" and possibly mean tariffs.

Some 80 per cent of the 1.7m cars built each year in Britain are exported.

Nearly 60% of the cars made in the United Kingdom are sold in Europe, and many components travel back and forth across the channel to various plants during the manufacturing process. "This would undermine our competitiveness and our ability to attract the investment that is critical to future growth".

Britain's vehicle industry set out a list of Brexit demands to Prime Minister Theresa May's government on Tuesday, warning that a return to World Trade Organisation rules could permanently damage the successful sector.

THE government needs to sort an interim arrangement with the European Union to stop the United Kingdom auto industry plunging "off a cliff edge" as Brexit nears, trade body the Society of Motor Manufacturers and Traders urged today.

Tim Lawrence, global head of manufacturing at PA Consulting, said: "The key point that has come out of it [the report] for me is the potential impact if we don't come up with a trade deal and we don't come up with a solution", he said.

"We have asked for clarity and certainty", Hawes said.

Turnover in the United Kingdom auto industry hit a record past year alongside a big increase in research and development spend that boosted productivity, a leading industry group said.

While the council said the figures marked a significant move in the right direction, the proportion could still be problematic for some export agreements. "However, for United Kingdom auto manufacturing to continue to thrive, we need clarity on the future, post Brexit, to encourage ongoing investment and growth".