U.K. Automakers Set to Retrench After ʽBrexitʼ OK

LONDON – Automakers are calling for economic stability and the maintenance of tariff-free trade following U.K. voters’ approval Friday to leave the European Union.

The Society of Motor Manufacturers and Traders (SMMT), trade body for the U.K. automotive sector, says the 52%-48% vote to leave the EU must not risk the nation’s lucrative car-making industry.

U.K. automakers account for more than £69.5 billion ($103 billion) turnover and £15.5 billion ($2 billion) value added. The industry employs about 160,000 people directly in manufacturing and more than 799,000 across ancillary industries, accounting for 11.8% of total U.K. export of goods and investing £2.4 billion billion ($3.3 billion) each year in automotive R&D.

More than 30 manufacturers build more than 70 individual vehicle models, supported by about 2,500 component providers and skilled engineers.

Mike Hawes, SMMT chief executive, says: “The British public has chosen a new future out of Europe. Government must now maintain economic stability and secure a deal with the EU which safeguards U.K. automotive interests.

“This includes securing tariff-free access to European and other global markets, ensuring we can recruit talent from the EU and the rest of the world and making the U.K. the most competitive place in Europe for automotive investment.”

Prime Minister David Cameron announced his resignation in the wake of the vote. The British pound was down as much as 11% Friday and the euro lost up to 4% of its value.

The Freight Transport Assn. says leaving the economic union risks new costs, restrictions and bureaucratic requirements being imposed on moving goods in and out of Europe.

These additional burdens could add costs for FTA members and disrupt the U.K.’s supply chains, it says in a statement.

“FTA is calling on the government to prioritize arrangements for international freight transport in its negotiations, minimizing additional legislation and keeping costs as low as possible for British businesses,” it says.

“Even though we are coming out of Europe politically, it remains our biggest export market and the supplier of a high proportion of our imports,” FTA CEO David Wells says.

“We cannot allow new bureaucratic burdens to hamper the efficient movement of exports heading for customers and imported goods destined for British consumers.”

“Britain may be out of Europe but itʼs not out of business, and FTA will be leading the campaign on behalf of exporters and importers to keep trade procedures simple and the costs of international transport down,” Wells says.

 – with Alan Harman in Detroit