Operating under World Trade Organisation (WTO) tariffs would cost the UK’s automotive sector up to £55 billion by 2025, an industry body has claimed.
The Society of Motor Manufacturers and Traders urged the Government to “stretch every sinew” in its negotiations with the EU to secure an agreement that avoids such a scenario when the Brexit transition period ends after December 31.
Trading under WTO rules would keep annual vehicle production “below one million units consistently”, the SMMT said.
Some 1.3 million cars were built in the UK in 2019.
There are no tariffs on goods traded between the UK and the EU, but that arrangement is only in place until the Brexit transition period expires.
If no agreement is reached, future trade could fall back on WTO rules, which involve tariffs and quotas.
Speaking at SMMT 2020 Update Live, the organisation’s president Dr George Gillespie said: “We need a future trading relationship that works for automotive.
“We’ve already spent nigh on a billion pounds preparing for the unknown of Brexit and lost 28 times that to Covid.
“Let us not also be left counting the cost of tariffs, especially not by accident.
“Industry can deliver the jobs growth we need and help rebuild a devastated economy, but Government must work with us to create the environment for this success.
“That starts with a favourable Brexit deal and a bold strategy to help transform automotive production in the UK, attract new investment, upskill our workforce and build world-leading battery capability to future-proof our manufacturing.
“When Covid lifts, we need to be ready.
“Ready to support Government to engineer an economic and green recovery.”