Brexit: 77% of UK Motor Industry Wants Britain to Remain in EU

Brexit: 77% of UK Motor Industry Wants Britain to Remain in EU
More than three-quarters of members of the Society of Motor Manufacturers and Traders stated that if a referendum on EU membership were held tomorrow, a ‘remain’ outcome would be best for their businesses. More than three-quarters of the UK motoring industry believes the UK leaving the EU (known as ‘Brexit’) would be harmful to business, a new survey has found.

It revealed that 88% of large motor industry businesses were against leaving the EU, while 73% of smaller and medium sized enterprises wanted to stay. 77% of the industry as a whole agreed Europe was best for business. This contrasts with 9% of respondents who thought an exit from the EU would benefit business. 14% answered saying they were unsure of its effects, reflecting the level of uncertainty around the issue.

Leading voices in support of remaining in the EU include senior members of Toyota, BMW and Vauxhall. Mike Hawes, SMMT chief executive, said: “The message from UK Automotive is clear – being in Europe is vital for the future of this industry and to secure jobs, investment and growth.”

He said 77% of cars built in the UK were exported last year, with 57% of those going to European customers. 1.3 million British-built cars were exported last year – the highest on record – and the industry accounted for a significant 11.8% of all UK exports, worth £15 billion to the economy. The industry employs 800,000 people. “Leaving would put many of these jobs at risk.”

Tony Walker, Toyota’s deputy managing director, suggested his company’s investment in the UK could be hindered if the country left Europe. “Toyota has two manufacturing plants in the UK. We export nearly 90% of our UK-made cars, the vast majority to EU countries.

“After a careful assessment, we believe [Brexit would add] some tariffs or tariff barriers, leading to a loss of efficiency in business as well as a loss of harmonisation in vehicle regulation. Leaving would open up a very uncertain future of technical difficulties and increasing costs.”

Dr Ian Robertson, a member of BMW’s Board of Management, added: “Our experience shows that the free movement of components, finished products and skilled workers within the EU is extremely beneficial to British-based business. Even if we left EU, the regulations of the EU will still apply. It’s very clear that Britain’s role as a rule-shaper, rather than a rule taker, is very important.”

Nigel Stein, chief executive of British engineering firm GKN (responsible for designing the drivelines for nearly half of the world’s cars), believes the UK will struggle to compete with EU business alone: “A vote to leave will not mean manufacturing investment disappears overnight, but over time a UK outside the EU will be disadvantaged and will lose the investment it needs to maintain our industries.

“The relative size of the pan-European market compared to the UK market means it would be hard for us to compete alone. GKN’s European manufacturing plants would likely become more important to business [if Brexit went ahead].”

Stein agreed with Robertson’s comments, saying: “If we left, it is likely that we will end up with a free-trade-like deal that will put the UK at a significant disadvantage compared to our European competitors.”

Smaller businesses also argued that EU membership gave them a competitive advantage on a global scale. Gamil Magal, Group chief executive of Magal Engineering, said: “we benefit heavily from a free movement of employees across Europe. Our rapid growth would be hampered without this.” Magal added: “Does anybody really believe that the EU would offer an independent UK better trade terms than it does to those who are within it?”

Almost all SMMT members agreed that remaining in a market where there are more than 500 million consumers was essential to ensure the UK remained competitive though many did agree some reform was needed. Hawes said the SMMT wanted Britain to remain in Europe, but with more power to influence EU business decisions. “If we stay in Europe, we really hope David Cameron will make the most of it.”

The UK public will vote on whether to stay in the EU in a referendum held on 23 June 2016.