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CBI chief warns of Brexit 'extinction' risk to UK car industry

Parts of Britain’s ?77.5bn a year car industry face being wiped out if Britain fails to secure a tariff and customs free Brexit deal, the CBI has claimed.
Paul Drechsler, president of pro-Europe business lobby group the CBI, spelled out a doomsday scenario for the sections of the motor industry and other sectors.
The former boss of industrial group Bibby Line told the BBC: “If we do not have a customs union, there are sectors of manufacturing society in the UK which risk becoming extinct. Be in no doubt, that is the reality.”
He singled out the automotive sector as particularly at risk unless the UK can secure “real frictionless trade” agreements.
Much of Britain’s car industry, which employs more than 800,000 people, is dependent on complex supply chains moving parts from around Europe on a “just in time” basis.
CBI chief warns of Brexit 'extinction' risk to UK car industry

CBI boss Paul Drechsler says Brexit poses a huge danger to manufacturers in the car industry

Credit:
Agnese Sanvito 
Manufacturers with plants in the UK such as BMW, Honda and Nissan have repeatedly warned of the risks of delays at borders if customs checks are re-introduced. 
Many of their factories hold a few hours of supplies, meaning even small hold-ups at ports could result in factories shutting down. Red tape around customs is also likely to create a heavy cost burden in the automotive sector.
Mr Drechsler highlighted that it was not just top tier manufacturers that would be hit by tariffs and border delays, saying the impact would be felt right through the supply chain.
The CBI chief - who is due to step down this month and recently hit out at politicians for "talking down" British business, instead of promoting it - also questioned the value of Britain trying to negotiate its own global trade deals.
“There's zero evidence that independent trade deals will provide any economic benefit to the UK that's material,” Mr Drechsler said speaking on the Today programme. “It's a myth.”
CBI chief warns of Brexit 'extinction' risk to UK car industry

About 80pc of the cars built in Britain are exported - most of them to Europe

Credit:
Getty
Instead he called for the UK to utilise the scale of the EU to help thrash out trade deals. He also hit out at the Government for failing to give business clarity on what Brexit will look like, creating uncertainty about investment in the UK.
"We have a negotiation within the UK Government that's gone on for nearly three years,” the CBI boss said. "We still haven't got clarity about the future direction, about where we're heading, what will the future relationship with Europe be, at a level of detail that matters for investment."
His claims appear to be backed up by data from car industry lobby group the Society of Motor Manufacturers, which showed that car companies and their suppliers invested ?1.1bn in 2017, down from ?1.7bn in 2016 and ?2.5bn the previous year.
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