Brexit uncertainty prompts carmakers to consider UK exit

Carmakers will consider closing their UK factories if they do not receive certainty over Brexit, the head of the industry body has warned, as the latest figures showed new car sales fell by 3.4 per cent last month.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said that carmakers “are under a lot of pressure for a degree of certainty [over Brexit], otherwise they might be looking to move”.

“If there is no deal then clearly manufacturers will review their investments,” he said at an SMMT conference in London.

New investment across the industry has fallen by 80 per cent over three years, partly as a result of uncertainty over Brexit, while Honda has announced the closure of its factory in Swindon.

Figures released on Thursday indicated that uncertainty was also affecting car sales, which fell in March, normally a bumper month because of new registration plates.

Sales fell to 458,054 in the month, compared with 474,069 in the same month a year earlier, with sales of diesel cars down 21.4 per cent to 124,677. Petrol-powered car sales rose 5.1 per cent to 312,075.

The number of electric or hybrid vehicles sold rose 7.6 per cent to 25,302, and accounted for 5.5 per cent of new sales.

Car sales in the first quarter of 2019, which typically accounts for a third of annual sales, fell by 2.4 per cent to 701,036 vehicles.

Matt Watson, of online marketplace Carwow, said that the fall was a “stark demonstration of how Brexit has created uncertainty in the motoring space”.

Ian Plummer, director at Auto Trader, another online marketplace, said that two-thirds of consumers expected prices of new vehicles to rise after Brexit, as manufacturers passed on tariffs or other higher import costs to new car buyers.

Mr Hawes said: “March is a key barometer for the new car market, so this fall is of clear concern.”

He added that concerns over Brexit, including no-deal preparations costing millions of pounds, were “devouring valuable time and investment” across the industry, and distracting from the development of self-driving technology that had the potential to save lives.

An SMMT report released on Thursday estimated that driverless vehicles could add £62bn to the UK economy by 2030 by saving lost time currently spent driving.

But Mr Hawes added the industry risked falling behind unless the “deadlock” over Brexit was broken.

The warning comes the day after Ford’s European chairman, Steven Armstrong, said the US carmaker would “take a long hard look” at its two UK plants in the event of a no-deal scenario.