By Ashley Young-
Investment in Britain’s car industry has effectively stopped over Brexit fears £90m pledged for new developments in the first six months of this year, according to the industry body.
The Society of Motor Manufacturers & Traders (SMMT) said a Brexit deal was necessary to help the embattled industry to bounce back, otherwise the government will face demands for the same type of tax breaks farmers need to stay afloat.
The SMMT says investment fell to just £90m in the first six months of the year from £347m last year. In that time, 666,521 new cars rolled off production lines, compared to 834,573 during the same period in 2018. The SMMT also revealed that the industry has sunk £330m into contingency plans for a no-deal.
“That shows you the scale of expenditure having to be made potentially for no reason if we get a deal,” SMMT’s chief executive, Mike Haws said in a press briefing.“But the most worrying figure is investment. The fear of no deal is causing investors to sit on their hands. There is political uncertainty. There is economic uncertainty.
“The worst outcome would be no deal, that’s what they fear and that is why they are not investing. In terms of underlying trends, undoubtedly £90m is pitiful.”
He added: “Investment-wise, over the last seven years we’ve averaged about £2.5bn to £2.7bn per annum. That fall [to £90m] is precipitous.”The £330m on contingencies has been spent on areas including new IT systems, regulatory work on cowever, he stressed that nothing can be done to deal with the impact on tariffs on UK exports of cars to the EU, for example, or the massive disruption to seamless “just-in-time” supply chains across the English Channel that the industry relies on.
The impact on tariffs on UK exports of cars to the EU is expected to be detrimental to the car industry, with massive disruption to “just-in-time” supply chains across the English Channel that the industry heavily relies on. Business and consumer confidence has taken a big knock too over Brexit, with many businessmen uncertain how taxes will affect investment and returns.
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