Car makers warn: Brexit fear is holding back new investments

Car manufacturers have warned Theresa May there is “no Brexit dividend” for the industry, with investment in the motor trade and thousands of jobs at risk unless the government rethinks its red lines in negotiations.

In the starkest warning yet from a single business sector, the car lobby told the government it needs “as a minimum” to remain in the customs union with a deal that delivers “single market benefits”.

“There is no Brexit dividend for our industry,” said Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT).

He said Brexit uncertainty was hitting investment and repeated calls for the UK to stay in the customs union until the government came up with a “credible plan B”.

With investment slowing and time running out, negotiators had to get on with the job of agreeing a deal that would put an end to uncertainty and prioritise the needs of the automotive sector, the SMMT said.

Car giant BMW has also aired concerns over the future of the motoring industry post-Brexit.

The German giant employs around 8,000 people in the UK with its plant in Oxford producing the popular Mini range.

Stephan Freismuth, its Senior Director, said delays in importing components would put the operation under serious threat, potentially forcing UK closures.

He told the Financial Times: “We always said we can do our best and prepare everything but if, at the end of the day, the supply chain will have to stop at the border, then we cannot produce our products in the UK.”

But BMW’s UK boss Dr Ian Robertson insisted that the firm was “not considering” whether it would move investment out of Britain if the country left the customs union and the single market.

He told reporters at an SMMT event in central London: “We are considering what we would need to have in place to overcome such impediments to border fluidity. That’s where we are focused right now.

“It would be foolhardy of any company not to have these contingency ideas under way because we are racing towards March 29 next year.”

Mr Robertson said he would “hate” it if the UK was “knocked off course because of some changes in the political environment” but added: “Knocking off course does not mean a complete U-turn.”

Jim Holder, editorial director of What Car? magazine, stressed there was “definitely a change in tone” from manufacturers on Brexit.

He explained: “The industry is getting to a point where it needs answers and it’s gone from politely waiting for an answer to now pushing to get one because it is into the critical planning phase,” he said.

Theresa May’s spokesman insisted there was an “absolute consistency” to the Government’s message on Brexit, which was a commitment to a smooth and frictionless as possible withdrawal from the EU and which the Government had made considerable steps towards providing.

“Business, including the automative industry, set out as a priority that it wanted an implementation period and that is what we have secured,” he said.

Asked why the Government’s message on Brexit was not getting through to the business community given the increasing number of firms expressing worries, the spokesman said this was not a question for him and that he had set out what the Government position was.