The lobby group representing the UK car industry says manufacturers have “wasted” more than £500m in preparations for Brexit.
The Society of Motor Manufacturers and Traders (SMMT) made the declaration following a survey of its members that suggested a third of companies were already cutting jobs in anticipation of a car crash no-deal scenario.
The SMMT, one of the most vocal critics of such a potential outcome, has consistently argued the sector can only thrive with “just in time” delivery of parts from EU suppliers and free trade.
A growing list of top names, including Toyota and Jaguar Land Rover, have announced UK plant shutdowns to coincide with the latest Brexit day of 31 October – to mitigate any disruption.
Similar shutdowns in April were blamed on Brexit and helped contribute to a sharp decline in UK economic output during the second quarter of the year.
The industry has been battling Brexit at a time of intense change – particularly in the drive for electric vehicles – and a sharp slowdown in demand for new cars globally.
Honda and Ford have insisted there was no Brexit link behind decisions this year to shut factories in Swindon and Bridgend respectively.
The SMMT said some of the UK’s biggest manufacturers had spent more than £500m in an attempt to mitigate at least some of the risks of a ‘no deal’ scenario through things such as securing additional warehouse capabilities and stockpiling.
It said the sum could have been invested in much-needed research and development but was “already wasted on measures that will not deliver returns”.
The group said profitability, new business opportunities and investment were all under threat as the industry faced a £5bn tariff bill on cars and vans alone from the UK trading under World Trade Organisation rules.
It said of its survey: “The results are consistent and striking. One in three UK automotive businesses is already cutting jobs, up from one in eight when the survey was last carried out in November 2018.
“Four-fifths (80.3%) fear leaving the EU without a deal will have negative consequences for their future prospects (up from 74.1% 10 months ago).
“Virtually the same number (79.6%) are worried about the impact on their profitability while two-thirds (62.2%) are saying ‘no deal’ will impact their ability to win overseas business and a similar number state that they will be unable to invest in their UK operations.”
SMMT chief executive, Mike Hawes, added: “As the Brexit clock ticks ever closer to midnight, this survey reveals the bleak future that awaits this vital sector in the event of ‘no deal’.
“Damage has already been done: investment is haemorrhaging competitiveness being undermined, UK jobs cut and vast sums wasted on the impossibility of preparing for ‘no deal’.”
The Department for Business was yet to give its response to the SMMT’s report.