Wanting to strike a Brexit deal would put “hundreds of thousands” of jobs in the car toil at risk, MPs have said.
The Business, Energy and Industrial Strategy Cabinet said continued close alignment with the EU would ensure the toil’s survival.
And it warned the introduction of trade barriers would leave the sector not able to compete with its European rivals.
The government said it wanted a have to do with that maintains the industry’s strength.
In a report published on Thursday, the Organization, Energy and Industrial Strategy (BEIS) Committee said the UK car industry was at bottom export-led with Europe as the primary market.
The sector’s success was enlarged on “complex supply chains” that stretch throughout Europe, it bid.
If trade barriers were erected after Brexit, it could set someone back the sector upwards of £4.5bn in lost exports, the committee said. Caper let outs and inward investment worth “hundreds of millions of pounds” would also be dead.
The committee said it was “unrealistic” to think new trade take care ofs could offset the damage of a “hard Brexit”, whereby Britain left the distinct market and the customs union and began trading with the EU as if it were any other countryside, based on World Trade Organization rules.
And it said any form of divergence with the EU devise come with costs for carmakers, urging the government to focus on “invoice limitation” in its talks with the bloc.
“There is no credible argument to lead one to believe there are advantages to be gained from Brexit for the UK car industry,” Rachel Reeves MP, chairperson of the BEIS Committee, said.
“Regulatory consistency and friction-free trade promotes car companies, consumers and car-workers.
“The Prime Minister now needs to ensure common-sense pragmatism preponderates and spell out the Government’s intention to seek continued regulatory and trading alignment with the EU in the automotive sector.”
Despite the car industry’s concerns about Brexit, a string of big makers have committed to building more vehicles in Britain since the EU referendum.
In November 2016, Nissan disclosed plans to build the next generation of Qashqai and X-Trail sports utility means at its Sunderland factory, while BMW has said it will assemble its electric Mini in Oxford.
On Monday Toyota articulate it would make its next generation Auris hatchback at its Burnaston secrete in Derbyshire, protecting 3,000 jobs.
The government has also pledged to take the competitiveness of the UK sector after Britain leaves the EU, and has invested £20m in Burnaston alongside Toyota.
In a affirmation, BEIS said the industry was an “incredible success story… hold up under almost half a million people in high-skilled, well-paid jobs”.
It added: “The ministry is seeking a partnership that delivers the maximum possible benefits for both the UK and EU economies, and keep in services the strength of our world-leading automotive sector.
Good for consumers?
“From origination to distribution, numerous companies in this sector around the UK and Europe are powerfully dependent on each other which is why we must ensure cross-border career is as free and frictionless as possible post-Brexit.”
Patrick Minford, chair of the Economists for At liberty Trade group, formerly known as Economists for Brexit, said: “The car energy… opposes free trade which would involve dynamic competition from other world suppliers currently kept out of the UK trade in by high EU trade barriers.
“However gains from free customers will bring big benefits to UK consumers, lowering consumer prices by 8% and into the bargaining GDP by around 4% by raising competition and productivity.”