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UK motor industry backs UK remaining in Europe, finds survey Toyota UK warns of cutbacks if Britain leaves EU
(about 4 hours later)
More than three-quarters of companies involved in the UK motor industry believe a vote to remain in Europe would be best for their business, according to a survey. Toyota, one of the biggest manufacturers in Britain, has warned it will be forced to make significant cutbacks if the country votes to leave the EU.
The Society of Motor Manufacturers and Traders (SMMT) found that 77% of its members backed the UK staying in the EU. The figure rose to 88% for large automotive companies, and was 73% for small and medium-sized ones.
Two-thirds of members think access to EU automotive markets has a positive impact on their company.
The SMMT membership includes leading car manufacturers such as Ford, Vauxhall, VW, Nissan and Toyota. The industry relies heavily on EU exports – which accounted for 57.5% of the vehicles produced in the UK in 2015, when car manufacturing reached a 10-year high of 1.59m units.
The ability to hire a skilled workforce (55%) and influence industry regulations (52%) were also given as benefits of EU membership.
SMMT’s chief executive, Mike Hawes, 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.
“UK automotive is thriving, with record car exports, new registrations and the highest manufacturing levels for a decade. Our industry supports 800,000 jobs across the UK and contributes more than £15bn to the UK economy. Our members have clearly stated that pulling out of Europe could jeopardise this.”
The majority of SMMT members (59%) believe a Brexit would have a negative impact on their businesses in the medium to long term, with 18% uncertain about the consequences.
Fears about losing business to EU rivals and about future investment being diverted to the continent were among the reasons given by those who predicted there would be a negative effect if the UK votes to leave at the referendum.
Related: EU referendum: Rolls-Royce warns its staff of Brexit risksRelated: EU referendum: Rolls-Royce warns its staff of Brexit risks
Rory Harvey, managing director and chairman of Vauxhall, said: “The UK is the fourth largest global market for Vauxhall’s parent company, GM, and the largest EU market. We are part of a fully integrated European company where we benefit from the free movement of goods and people, and we believe not to be part of the EU would be undesirable for our business and the sector as a whole.” Tony Walker, deputy managing director of the carmaker’s UK operations, said Brexit could reduce the competitiveness of its factories and create an uncertain future.
Tony Walker, deputy managing director at Toyota Motor Manufacturing UK, said: “Our UK operations are fully integrated within our European business – exporting nearly 90% of all UK-built vehicles. We are very satisfied with the performance of our UK operations and are committed to our employees and investments. Toyota employs about 3,500 people in the UK at factories in Burnaston, Derbyshire, and Deeside, north Wales.
“We also recognise that the UK’s future relationship with the European Union is a matter for the British people to decide. After considered review, we believe that continued membership of the European Union is best for our business and for our competitiveness in the longer term.” Walker said Toyota remained fully committed to its UK business and existing investment decisions. However, he raised the prospect of significant cuts at Toyota in the UK once the programme of investments planned for the next two to three years are over.
Toyota exports 90% of the cars it makes in the UK, but Walker warned that export costs would increase if the country leaves the EU due to tariffs, a loss of efficiency, and a lack of harmonisation in regulations across the continent.
“We will work to take costs out,” Walker said. “But it is very, very difficult to do that.” He was speaking at a press conference organised by the Society of Motor Manufacturers and Traders, which revealed that 77% of companies involved in the UK automotive industry believe a vote to remain in Europe would be best for their business.
The car industry has been one of the success stories of the UK economy since the financial crisis. The country exported 1.3m vehicles last year – the highest on record – and accounted for almost 12% of all UK exports. The automotive industry now employs 800,000 and is worth £15bn a year to the economy.
The SMMT found 88% of large automotive companies support staying in the EU, with 73% of small and medium-sized businesses also wanting to remain. Two-thirds of SMMT members think access to EU automotive markets has a positive impact on the company.
The SMMT membership includes leading car manufacturers such as Ford, Vauxhall and Nissan, as well as Toyota. The industry relies heavily on EU exports – which accounted for 57.5% of the vehicles produced in the UK in 2015, when car manufacturing reached a 10-year high of 1.59m units.
Mike Hawes, chief executive of the SMMT, said Brexit is “one of the most important issues facing UK automotive industry” and that being in Europe is “vital for the future of this industry and to secure jobs, investment and growth”.
He added: “I don’t think it’s a question about the number of jobs [that could be lost]. We are looking at the medium to long-term, the next round of investments.”
Walker said that Toyota was supporting the campaign to stay in the EU after a “careful assessment”. However, he admitted that the company had “no plan B” if Britain did vote to leave.
The majority of SMMT members – 59% – believe Brexit would have a negative effect on their businesses in the medium to long-term, with 18% uncertain about the consequences.
Fears about losing business to EU rivals and about future investment being diverted to the continent were among the reasons given by those who predicted there would be a negative effect if the UK votes to leave at the referendum.
The SMMT issued its findings as it emerged that BMW, which owns Rolls-Royce Motor Cars and Mini, has written to its 8,000 staff in the UK to warn that an exit from the EU would drive up costs and prices, and could affect the company’s “employment base”.
Ian Robertson, a member of the BMW board, said at the SMMT event: “Our experience shows that the free movement of components, finished products and skilled workers within the EU is extremely beneficial to British-based business.
“We firmly believe Britain would be better off if it remained an active and influential member of the EU, shaping European regulations which will continue to impact the UK whatever the decision in June.”