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The car industry might suffer if a Brexit deal isn’t made clear

The Government must agree on a Brexit deal by the end of March for the automotive industry to stay competitive, says the Society of Motor Manufacturers and Traders (SMMT).

Mike Hawes, the Chief Executive of SMMT, urges the politicians to give more information to the industry about the deal so that the car market can maintain its position. In 2017 it was down by 5.6% and unless a decision is made the members will keep struggling investing if they don’t know what is ahead.

He says that if no clarification will be brought by the end of the first quarter of the year, then the “industry will have to start taking contingency measures, such as stockpiling parts and vehicles, which costs money and makes them less competitive.”

The Brexit situation impacted on vehicle sales and people opted to hold on to their existing cars or buy used ones rather than choosing new. The new car registration estimates have been in decline and the current figures are lower than expected.

Even though Hawkes thinks that the Brexit did not result in anyone losing their job, it did cost potential new jobs “production and sales are down, which isn’t good for the industry.”

However, an incident in October resulted in a 400 jobs cut when Vauxhall announced that it would move its workers from Ellesmere Factory in Cheshire to a single shift through a ‘voluntary separation programme’.

The carmaker commented that the move was not made because of the Brexit, but because they needed to bring costs down in line with its benchmark factories in France.

Hawkes tried to point out the opportunities that could be made available after Brexit: “there could be advantages to having a factory that uses sterling and is outside the EU in close proximity to Europe.”