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Britain's luxury car industry at risk without Brexit deal

Britain’s global leadership in advanced technologies used in high performance cars could be threatened unless the the UK achieves a favourable Brexit deal.
A new industry report reveals that while UK heads the world in the low volume, high value car manufacturing industry, this could be endangered by leaving the EU.
The study by the Society of Motor Manufacturers and Traders reveals that the sector - which include sports cars such as Aston Martins, McLarens and TVRs, specialist vehicles such as electric taxis and even luxurious bespoke vehicles such as Rolls-Royces - produced 32,000 vehicles last year.
This is up 25pc on the number four years ago, and generated a turnover of ?3.6bn in 2016. According to the SMMT, if current trends continue, output is surge 60pc by 2020, hitting an annual rate of 52,000 vehicles.
Britain's luxury car industry at risk without Brexit deal

Car chiefs from the low volume sector at the launch of an industry report on the future of the market

Credit:
PA 
However, the SMMT warned that the outside of the EU, British manufacturers developing new technologies - such as lightweight materials, aerodynamics and turbocharging and miniaturisation - might be hampered in their efforts if they cannot influence European regulations to take into account the challenges thrown up by novel inventions.
“Our specialist car manufacturing sector is one of the UK’s global success stories – making world-leading products and pioneering next generation technologies that benefit everyone,” said Mike Hawes, SMMT chief executive.
“For this to continue we need certainty on Britain’s future trading relationships, including customs plans, market access, regulations governing the design, production and approval of vehicles. This will provide the assurance the sector needs to remain competitive and make investment decisions that enable it to continue to develop innovative, exciting and desirable products that are the envy of the world.”
In numbers | UK car industry
However, speaking after the report's publication, industry chiefs presented what was described as  a “buccaneering” spirit in the face of Brexit despite technical challenges.
Andy Palmer, chief executive of Aston Martin, said: “There’s some good news in Brexit for our part of the industry. The weak pound means there’s pricing advantages, tariffs work both ways and that could shut out competitors such as Ferrari.”
He added that he expects a deal on Britain leaving the EU because of the UK’s reputation as being the “Treasure Island” of Europe for the car industry, largely because of its appetite for cars.
“I’m sure there will be an agreement - the UK is too important for European manufacturers - if you take away the treasure then it becomes just an island.”
His thought were echoes by executives from McLaren, Lotus and TVR. 
“We work in the luxury goods market, so if prices rise in the event of tariffs, well it’s not desirable but it is by no means the end of the world,” said TVR chairman Les Edgar.
McLaren vehicle line director Andy Palmer added: “Brexit is something we will manage and move on - it’s the British spirit. We’ve good products we need to engineer and launch and we are not letting it get in the way.”
Britain's luxury car industry at risk without Brexit deal

McLaren production line in a minute
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The smaller volume manufacturers tend to be higher priced, meaning they are more relaxed about Britain leaving the EU than bigger manufacturers, where margins are very thin and pricing is cut-throat.
However, one pervading concern is regulation. Simon Woods, chief technical expert of type approval, at Lotus said: “Our chief worry is that we still have a voice in Europe in regulation.”
He added that with British companies leading the way in many fields, the UK has traditionally been seen as a voice worth listening to. 
“My experience of working with the European Commission is that they are willing to listen to us as we have a knowledgeable voice,” Mr Woods. “Hopefully that will continue even after Brexit.”
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