More than three-quarters of the UK motoring industry believes the UK leaving the EU (known as 'Brexit') would be harmful to business, a new survey has found.
It revealed that 88% of large motor industry businesses were against leaving the EU, while 73% of smaller and medium sized enterprises wanted to stay. 77% of the industry as a whole agreed Europe was best for business.
The UK’s motor industry, represented by the Society of Motor Manufacturers & Traders (SMMT) members, announced the findings after the results from an independent survey compiled by ComRes were released.
This contrasts with 9% of respondents who thought an exit from the EU would benefit business. 14% answered saying they were unsure of its effects, reflecting the level of uncertainty around the issue.
Leading voices in support of remaining in the EU include senior members of Toyota, BMW and Vauxhall. Mike Hawes, SMMT chief executive, 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."
He said 77% of cars built in the UK were exported last year, with 57% of those going to European customers. 1.3 million British-built cars were exported last year – the highest on record – and the industry accounted for a significant 11.8% of all UK exports, worth £15 billion to the economy. The industry employs 800,000 people. “Leaving would put many of these jobs at risk.”
Tony Walker, Toyota’s deputy managing director, suggested his company’s investment in the UK could be hindered if the country left Europe. “Toyota has two manufacturing plants in the UK. We export nearly 90% of our UK-made cars, the vast majority to EU countries.
“After a careful assessment, we believe [Brexit would add] some tariffs or tariff barriers, leading to a loss of efficiency in business as well as a loss of harmonisation in vehicle regulation.
“Leaving would open up a very uncertain future of technical difficulties and increasing costs.”
A full statement on the issue further set out Toyota's stance on the referendum, specifically praising the "free access to the European market, the availability of a skilled workforce, and the presence of a strong network of suppliers."
"We support thousands of jobs in our manufacturing operations and more widely in our supply chain and distribution network. We manufacture vehicles, engines and parts and nearly 90 per cent of our UK-built vehicles are exported."
Toyota Europe CEO Johan van Zyl added: "We respect that the UK’s future relationship with the European Union is a matter for the British people to decide, and it is not our intention to participate in the campaign... We are committed to our people and investments, so we are concerned that leaving would create additional business challenges. As a result we believe continued British membership of the EU is best for our operations and their long term competitiveness."
Dr Ian Robertson, a member of BMW’s Board of Management, added: “Our experience shows that the free movement of components, finished products and skilled workers within the EU is extremely beneficial to British-based business.
“Even if we left EU, the regulations of the EU will still apply. It’s very clear that Britain’s role as a rule-shaper, rather than a rule taker, is very important.”
Meanwhile, Audi boss Rupert Stadler said the UK was seen as "a good partner" of the EU, saying "it has been a mutually beneficial partnership for the past years. We appreciate the UK market and assume we'll continue to do so."
Speaking to Autocar at the Geneva motor show, Mercedes-Benz boss Dieter Zetsche said that a Brexit would cause "tremendous damage" to his firm's European plans. "In the last 70 years Europe has progressed from being a continent at war, to a single community. We don't all pull in the same direction and at the same time, but it would be terrible to see this process put into reverse." He also said that the economic consequences of a Brexit would be "much more serious for the UK than for the rest of Europe."
PSA Peugeot-Citroen boss Carlos Tavares also spoke out on the referendum: "This is something we can do nothing about. The people of the UK must make their own decisions. The business risk comes from a loss of revenue around currency and trading. The situation is that if the pound weakens and hits profits, then prices will rise to compensate. Ultimately, we hope the UK will stay - we see that as better than it fighting for itself.”
Nissan boss Mr. Carlos Ghosn recently released a statement regarding the EU referendum, saying: "We have a rich heritage in the UK with 30 years of manufacturing and engineering presence, and remain committed to building and engineering cars in the country. Last year we produced more than 475,000 vehicles in the UK – 80 percent of which are exported.
“Our preference as a business is, of course, that the UK stays within Europe – it makes the most sense for jobs, trade and costs. For us, a position of stability is more positive than a collection of unknowns. However, this is ultimately a matter for the British people to decide.”
Nigel Stein, chief executive of British engineering firm GKN (responsible for designing the drivelines for nearly half of the world’s cars), believes the UK will struggle to compete with EU business alone: “A vote to leave will not mean manufacturing investment disappears overnight, but over time a UK outside the EU will be disadvantaged and will lose the investment it needs to maintain our industries.
“The relative size of the pan-European market compared to the UK market means it would be hard for us to compete alone. GKN’s European manufacturing plants would likely become more important to business [if Brexit went ahead].”
Stein agreed with Robertson’s comments, saying: “If we left, it is likely that we will end up with a free-trade-like deal that will put the UK at a significant disadvantage compared to our European competitors.”
Smaller businesses also argued that EU membership gave them a competitive advantage on a global scale. Gamil Magal, Group chief executive of Magal Engineering, said: “we benefit heavily from a free movement of employees across Europe. Our rapid growth would be hampered without this.”
Magal added: “Does anybody really believe that the EU would offer an independent UK better trade terms than it does to those who are within it?”
Almost all SMMT members agreed that remaining in a market where there are more than 500 million consumers was essential to ensure the UK remained competitive though many did agree some reform was needed.
Hawes said the SMMT wanted Britain to remain in Europe, but with more power to influence EU business decisions. “If we stay in Europe, we really hope David Cameron will make the most of it.”
The UK public will vote on whether to stay in the EU in a referendum held on 23 June 2016.