Brexit: investment in the car halved while the sector is on red alert

Investment in the UK auto sector nearly halved last year and output dropped as Brexit feared to put companies on the alert, the industry's trade body said.

Foreign investment fell 46.5 percent to 588.6 million pounds last year, up from 1.1 billion pounds in 2017, the Society of Motor Manufacturers and Traders (SMMT) said.

Production fell by 9.1% to 1.52 million vehicles, while that of the United Kingdom and exports fell by 16.3% and 7.3% respectively.

Uncertainty over Brexit has "caused tremendous damage," said SMMT chief Mike Hawes.

But the impact so far on production, investment and jobs "is nothing compared to the permanent devastation caused by the breakdown of our trading relationships without overnight friction, not only with the # But with the many other global markets with which we are currently trading freely, "he added. .

"With less than 60 days before leaving the European Union and the risk of bankruptcy without an agreement that seems more and more real, UK Automotive is on red alert," he said.

Politicians must do everything in their power to avoid a non-market, he said.

His bleak prognosis follows Wednesday's warnings from other business groups. Carolyn Fairbairn, Director General of the CBI, said Tuesday's vote to renegotiate the British withdrawal agreement "seems like a real dice".

Stephen Kelly, managing director of Manufacturing Northern Ireland, told the BBC that the companies attending were "desperate and very puzzled" about what was happening.

Hawes said that despite the vote of the House of Commons Tuesday night, "nothing has changed".

A spokesman for the government said: "Leaving the European Union, we will seek the broadest and deepest possible agreement offering the best possible benefits to the British and European economies and preserving the strength of our world's leading automotive sector. "

Analysis: Simon Jack, Editor-in-Chief of the BBC

Investments in the auto industry are uneven, with old models being withdrawn and new models introduced over time. Even with this in mind, the fall in new investment this morning is striking.

In 2015, car manufacturers invested 2.5 billion pounds sterling in the UK. Since then, it has fallen every year and in 2018 it only accounted for £ 589m.

Brexit uncertainty was not the only problem the sector was facing – confusion over diesel policy, falling sales in China and slowing production due to new regulations also played a role .

However, the SMMT has made it clear that Brexit presented what it calls "the most significant threat to the competitiveness of the British automotive sector for a generation".

Manufacturing companies that rely on pan-European supply chains with careful listening have issued the most acute warnings about the dangers of a Brexit without agreement. These numbers will do nothing to change that.

"Important threat"

The 16.3% drop in production of cars for sale in the United Kingdom is due to uncertainties about the future of diesel, regulatory changes and the deterioration in consumer confidence. consumers and businesses, according to the SMMT.

However, exports to the EU fell by 9.6%, which is less marked than the decline in domestic production.

Overall, the EU still accounts for the vast majority of UK exports, 52.6% or 650,628 cars. Although exports to the United States grew 5.3%, mainly due to demand for high-end models, Hawes warned that this improvement could reverse if tariffs are imposed. as part of post-Brexit tax changes.

Other key markets outside the EU would also be affected, he said. Last year, exports to Japan increased by 26% and 23% to South Korea, but he pointed out that both countries were subject to preferential trade agreements with the EU.

Exports to China fell 24.5%. Jaguar Land Rover (JLR), the largest UK automaker, has already pointed to the pain of slowing sales in China.

Stopping JLR

Earlier this month, JLR confirmed the cancellation of 4,500 jobs, due to uncertainty over Brexit, declining diesel sales and the economic slowdown in China.

The automaker also said it would extend its annual shutdown in April by an extra week, fearing that just – in – time deliveries would be disrupted if Britain left the door open. EU without agreement.

Hawes said last year's drop in production followed a decline in 2017 after seven years of unprecedented growth as the sector emerged from the recession.

"As a highly integrated sector that maximizes the benefits of the single European market and the customs union, a" no agreement "Brexit is the most significant threat to the competitiveness of the UK automotive sector for a generation", he declared.