The UK car industry wants the British government to back down on Brexit

Key Points
  • The main lobby group for the U.K. auto sector wants swifter progress on Brexit.
  • It says there is no credible "plan B" for the current arrangement with Europe.
  • BMW softens its tone on media reports it could close U.K. factories.
A vehicle being produced at Nissan's factory in Sunderland in the U.K.
Luke MacGregor | Bloomberg | Getty Images

Automakers have called on the U.K. government to back down from its “red lines” in Brexit negotiations, or risk putting hundreds of thousands of jobs at risk.

In a statement released Tuesday, the Society of Motor Manufacturers and Traders (SMMT) CEO Michael Hawes said Downing Street should “rethink its position on the customs union” and work towards a Brexit deal that delivers “single market benefits.”

A customs union is an agreement that allows partaking countries to set common external tariffs, allowing goods to travel freely between those nations. The customs union which covers Europe was created in 1958 as part of the European Economic Community (EEC), which then evolved into the European Union (EU).

The single market is a deeper form of co-operation between member states that allows the free movement of goods, services, money and people within the bloc.

Hawes said Brexit uncertainty would provide “no dividend for our industry” and the current position with its “conflicting messages and red lines” was against the interests of the U.K. auto sector.

“There is no credible ‘plan B’ for frictionless customs arrangements, nor is it realistic to expect that new trade deals can be agreed with the rest of the world that will replicate the immense value of trade with the EU. Government must rethink its position on the customs union,” he said.

Cars for sale at a motor dealer in Bristol in the U.K.
Matt Cardy | Stringer | Getty Images

The SMMT has estimated that In 2017, the number of jobs in UK automotive manufacturing rose to 186,000.The overall employment figure for the wider sector, including retail and logistics, was 856,000 in 2017.

Speaking ahead of the lobby group’s annual conference for the automotive industry on Tuesday, BMW’s top British executive said recent reports that the German carmaker could leave Britain had been overplayed.

“We are not considering that as an option. But we are considering what we would need to overcome any impediments to border fluidity,” said BMW’s U.K. CEO Ian Robertson. “It would be foolhardy of any company not to have contingencies underway because we are racing toward the 29th of March of next year.” March 29, 2019 is the date when the U.K. is set to officially leave the EU.

The BMW executive said while the firm accepted that Brexit was going to happen, it did not mean that the U.K. should differ from how Europe adopts regulation or treats borders.

Other firms to have issued recent warnings over the U.K.’s stance on Brexit include aerospace giant Airbus and Japanese car manufacturer Honda.