It was a sombre assessment of Britain’s carmaking future.

“A few years ago we had ambitions to make 2m units a year,” said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, in a meeting with MPs last week. “That’s not going to happen for the foreseeable future for some very clear reasons.”

The parliamentary committee, which was taking evidence on the impact of Brexit on Britain’s car industry, listened carefully as Mr Hawes set out a list of problems.

One was the impact of coronavirus, which contributed to a 29pc plunge in UK car production in 2020, down to 920,928 vehicles, the lowest level since 1984.

Another was that despite a trade deal struck with the EU which means no levies are imposed on vehicle exports to and from Europe, “non-tariff barriers” such as paperwork and customs friction are expected to drive up the cost of cars crossing the border by a couple of percentage points.

In an industry built on wafer thin margins and high volumes, such small adjustments can be highly significant.

Crunch time

It all sounds like grim news for UK carmakers. With the industry also grappling with tough decisions on the colossal investments required by the transition to electric vehicles, any further challenges – such as the fallout from Britain leaving the EU – are unlikely to improve Britain’s appeal as an investment destination for global players.

The tough questions facing manufacturers are encapsulated by a crunch decision over the future of Ellesmere Port on Merseyside, whose owner Stellantis has warned the 59-year-old plant could shut without government support.

The current model built there – the Astra – is coming to the end of its life. Tooling up for a new model will cost hundreds of millions of pounds, more if it is to be an electric vehicle with a radically different supply chain.



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