The imposition of WTO tariffs would “decimate” UK auto manufacturing, with 1.5 million vehicles lost by 2024 at a cost of £42.7bn.

New figures show tariffs would decimate UK manufacturing, with 1.5 million vehicles lost by 2024 at a cost of £42.7bn

That’s the finding of independent new research published by the Society of Motor Manufacturers and Traders (SMMT) as it urges the next government to strike an ambitious deal to safeguard the industry’s future.

The figures prepared for the trade body show WTO tariffs on imported components and exported vehicles would add more than £3.2bn a year to UK automotive manufacturing costs – equivalent to almost 90% of the sector’s annual spend on R&D and impossible for manufacturers to absorb, forcing prices to rise and global demand to shrink.

The analysis estimates the impact of such tariffs could result in the cumulative loss of more than 1.5 million units from UK production volumes over the next five years, worth some £42.7bn at factory gate prices.

As such, falling demand and reallocation of production to overseas locations would see annual output fall to just one million vehicles per year.

Mike Hawes, SMMT chief executive, said: “UK automotive’s needs are clear: frictionless trade free of tariffs, with regulatory alignment and continued access to talent. Detailed trade negotiations have yet to begin. They will be complex and they will take time. But a close trading relationship is essential to unlock investment so we can deliver our goals: cleaner air, zero carbon emissions, and the ability to go on building our products and marketing them globally.”