The Society of Motor Manufacturers and Traders has today published its Annual Trade Report for 2020 with new figures highlighting the risk a no-deal Brexit would pose to the UK.
The report estimates that the impact of the Covid-19 pandemic on vehicle manufacturing would cut annual car and light commercial vehicle production volumes by a third to just 920,000 units this year.
With an ambitious, tariff-free free trade agreement in place, full recovery is expected to take up to five years, with output reaching pre-crisis levels of 1.35 million units by 2025.
However, a ‘no deal’ scenario would severely damage these prospects and could see volumes falling below 850,000 by 2025 – the lowest level since 1953. This would mean a £40 billion cut in revenues, on top of the £33.5 billion cost of Covid-19 production losses over the period.
SMMT Chief Executive Mike Hawes said: “Covid has consumed every inch of capability and capacity and the industry has not the resource, the time nor the clarity to prepare for a further shock of a hard Brexit. That’s why we do need to ‘turbo charge’ the negotiations to secure a comprehensive Free Trade Agreement with the EU that maintains tariff and quota free trade.”