Fearing no-deal Brexit, UK carmakers slam brakes on investment
London (AFP) –
Britain's carmakers, fearful of a chaotic no-deal Brexit and global economic turmoil, are slamming the brakes on investment, the nation's automotive industry warned on Wednesday.
New investment in the sector crashed 70 percent to £90 million ($109 million, 98 million euros) in the six months to June, the Society of Motor Manufacturers and Traders said in a statement.
That contrasted sharply with an annual average of £2.7 billion over the previous seven years.
"Today's figures are the result of global instability compounded by ongoing fear of no-deal," said Mike Hawes, chief executive of the SMMT industry organisation.
"This fear is causing investment to stall, as hundreds of millions of pounds are diverted to Brexit cliff-edge mitigation -- money that would be better spent tackling technological and environmental challenges."
The SMMT also revealed that total production tumbled by a fifth to 1.7 million vehicles in the first half of 2019 from a year earlier.
In another worrying Brexit signpost, British-based carmakers meanwhile suffered their 13th successive monthly output drop in June.
The industry organisation has long argued that a no-deal Brexit would ramp up costs and hurt supply chains, while tariffs would undermine competitiveness and bite into profits.
Newly-installed British Prime Minister Boris Johnson has vowed to leave the European Union on October 31 come what may -- with or without a trade deal with Brussels.
Britain's biggest trade union Unite however called Wednesday on Johnson's Conservative administration to stem the loss of valuable investment and protect jobs.
"Prime Minister Johnson and his government cannot bat this aside," said Unite's assistant general secretary for manufacturing Steve Turner.
"There is a £330 million hole in investment into the UK auto sector because money must now be diverted into no deal preparations, draining the life out of the industry.
"That is money that ought to be creating new jobs and investing in new models and a future dedicated to the UK."
© 2019 AFP