Auto-industry investment in the U.K. has crashed almost 50% in the first half of the year amid growing uncertainty about what will happen when the U.K. quits the European Union.
The Society of Motor Manufacturers & Traders says first-half investment was just £347.3 million ($455.1 billion) for new models, equipment and facilities, down from a year-ago £647.4 million ($848.4 billion).
The industry group is calling for swifter progress on Brexit as the auto industry demands a deal that, as a minimum, maintains customs-union membership and delivers single-market benefits.
“With investment slowing and time running out, negotiators must get on with the job of agreeing on a deal that will put an end to uncertainty and prioritize the needs of the automotive sector,” SMMT says in a statement.
The call came as SMMT published the U.K. automotive annual sustainability report showing the manufacturing sector turned over a record £82 billion in 2017, marking an eighth consecutive year of growth.
“This positive growth is largely due to significant investment in the sector over the last decade,” SMMT says.
With decisions on new vehicle models in the U.K. due soon, SMMT says government must act to boost investor confidence and protect the thousands of jobs that depend on the sector.
“Government must end the current uncertainty about the U.K.’s future trading relationship with the EU,” it says.
Leaving the single market and customs union will halt the seamless movement of goods the U.K. automotive industry relies upon, with more than 1,100 trucks from the EU bringing components to car and engine plants every day.
SMMT CEO Mike Hawes says there’s growing frustration in global boardrooms at the slow pace of negotiations.
“The current position with conflicting messages and red lines goes directly against the interests of the U.K. automotive sector, which has thrived on single-market and customs-union membership,” he says.
“There is no credible ‘plan B’ for frictionless customs arrangements, nor is it realistic to expect that new trade deals can be agreed with the rest of the world that will replicate the immense value of trade with the EU. Government must rethink its position on the customs union.”
Hawes says there is no Brexit dividend for the U.K. auto industry, particularly in what is an increasingly hostile and protectionist global trading environment.
“Our message to government is that until it can demonstrate exactly how a new model for customs and trade with the EU can replicate the benefits we currently enjoy, don’t change it,” he says.