Hawes said Brexit was the biggest challenge the auto industry had faced in a generation, and warned that an untidy exit from the customs union would damage the industry permanently.
The British automotive industry called on government on Tuesday to seek an interim arrangement with the European Union, because it does not believe a comprehensive agreement can be reached by March 2019 - just over 20 months' time. Otherwise Britain could face a "cliff-edge" in 20 months that would be the "worst foreseeable outcome for the sector" and possibly mean tariffs. If the United Kingdom can not secure - and implement - a bespoke and comprehensive new relationship with the European Union in two years' time, we need a back-up plan.More news: Two deputies injured in shooting at Coffee County Courthouse
Britain's departure from the European Union's customs union would ramp up costs for small and medium-sized vehicle part suppliers to such an extent that supply chains could seize up, a senior European executive at Honda said on Tuesday. It needs that trade to be tariff-free, as frictionless as possible to support the "just in time" manufacturing process and with consistent regulation.
SMMT chief executive Mike Hawes said that United Kingdom automotive industry accepted Britain would be leaving the European Union, but raised doubts whether a final deal on a future relationship could be finalised and implemented by March 2019. "This would undermine our competitiveness and our ability to attract the investment that is critical to future growth".More news: Who Was Charleena Lyles? She Was Shot & Killed After Calling 911
"We need government to seek an interim arrangement".
Previous research has shown that if the United Kingdom was unable to reach a trade agreement with the European Union it could fall back on the World Trade Organisation (WTO) regime, where finished cars could face a 10 per cent tariff with components facing a 4.5 per cent fee.More news: Severe weather expected to affect 60 million Americans Monday
James Broadhead, CEO of Close Brothers Motor Finance added: "The automotive industry is unquestionably one of the leading lights of the British economy, with turnover in 2016 totalling a record £71.6 billion".
- Andy Murray, Kei Nishikori French Open quarterfinals match preview
- Tensions rise in Syria as Russia, Iran send US warnings
- Belmont Stakes Preview and Analysis: Irish War Cry Morning Line Favorite
- Judge Finds Defendant Guilty; Manslaughter Law Extending to New Grounds?
- New 'transforming' Forever Stamp commemorates August 21 total solar eclipse
- London mosque attack suspect arrested on terror grounds
- What we know: Pedestrians struck near north London mosque
- Vegas holds trade cards during expansion draft window
- Nadal is the best player ever on clay, says Wawrinka
- Van ploughs into Muslims in London