With no signs of agreement on an exit package for the U.K.’s departure from the European Union, the region’s automotive industry launches a Brexit readiness program to help safeguard its supply chain.
The Society of Motor Manufacturers and Traders initiative aims to help the industry, especially small and medium-sized businesses, prepare for the U.K.’s March 30, 2019, departure.
Without an agreement, the U.K. faces the prospect of customs barriers to trade between it and the European mainland.
SMMT says while OEMs and larger Tier 1 suppliers all face the significant challenge of Brexit, the vast majority of the U.K.’s automotive-supply chain companies are small or medium-sized, with 69% employing fewer than 10 people.
“These firms represent the backbone of the entire sector, yet not all will have the resources to prepare adequately for the dramatic and immediate change to trading conditions between the U.K. and EU in the event of a ‘no-deal’ Brexit,” the SMMT says in a statement.
The first phase of SMMT’s Brexit readiness program has five global companies from the legal and accountancy sectors joining forces with the automotive trade group to offer expert advice and consultancy services to members, including a free helpline for Brexit issues.
These issues include trade and tax arrangements outside of the EU, customs procedures and adapting to regulation changes from chemicals to data protection, employment law and immigration.
SMMT CEO Mike Hawes says the local supply chain is the backbone of any manufacturing sector, and it has thrived in the U.K. thanks to reshoring efforts
that have seen the local content of U.K.-made cars rising from 36% to 44% over the past seven years.
“With the clock ticking on negotiations, businesses must plan for all eventualities, including the worst,” Hawes says. “Our new support package seeks to mitigate the threat of ‘no-deal’ by helping businesses navigate the complex trade realities of a post-Brexit landscape.”
The U.K. automotive supply chain, which supports 82,000 jobs and contributes £4.9 billion ($6.4 billion) to the economy, is deeply integrated with the EU. It has thrived on free and frictionless trade afforded by membership in the single market and customs union, SMMT says.
