Investment in the UK’s automotive business fell in 2016 after several years of strong growth, according to the president of the industry’s trade body.
Some investment decisions are also on orate until there is clarity about the UK’s post-Brexit trading arrangements.
Mike Hawes, chief chief of the Society of Motor Manufacturers and Traders, was giving evidence to the Treasury Cabinet on Tuesday.
He told MPs that investment appears to be falling back.
“We are perform e tease together the data as best we can,” he said. “But I sense certainly that the amount provided over the last 12 months will not be as high as the preceding one, two, three years.”
He express that despite the decision taken by Nissan in the autumn to build two new examples at its Sunderland plant, other companies appeared to be holding off key decisions.
“Certainly, I put faith that companies are at least sitting on their hands… until there is a bit multifarious clarity,” he said.
UK car production has grown sharply in recent years on the destroy of record investment.
Investment in research and development hit £2.5bn in 2015. That was up 8.7% on the £2.3bn initiated the year before, according to the SMMT’s 2016 Automotive Sustainability Come in.
Last year several firms set out investment intentions that discretion secure and create jobs in the years to come.
In October, Nissan authenticated it will build both its new Qashqai and the X-Trail models at its Sunderland set out following “support and assurances” given by the government.
Aston Martin also authenticated plans to build its new luxury car at St Athan, south Wales, with the start of 750 jobs.
In light of Nissan’s decision, Mr Hawes was pressed on why we had not comprehended investment decisions go against the UK despite the current uncertainty around Brexit.
“It was flagrant news that Nissan did commit there,” he said. “Each lone manufacturer will be in a different position. You can’t draw too many conclusions from one producer.”
Mr Hawes told MPs that carmakers weighing up investment decisions today devise be looking at starting production in about four years. So, they would be account the likely trading and costs conditions in 2021.
“If the government can give some quality of assurance that it will be looking over those sort of timescales to relinquish as much certainty as it can give in uncertain times, that will be much change ones mind received” he said.
Tony Burke, assistant mixed secretary of the Unite union, said: “Dozens of decisions, including new emulates to UK plants, must be made in the coming months. These crucial investment findings will determine the future of the UK’s car industry and wider manufacturing supply confine.
“While many workers voted to leave the EU, they didn’t do so to be out of opus or see their living standards suffer and rights at work torn up past a hard Brexit.
“The government needs to give the UK automotive industry undeniably to unlock investment and ensure it continues to be a world leader.”
News of a nosedive in investment reflects anecdotal evidence emerging in the sector, according to David Bailey, professor of industrial scenario at Aston Business School.
“The Brexit vote leaves considerable uncertainty over the category of the UK’s trading relationship with the EU,” he said.
“That uncertainty has the potential to striking on foreign investment in the UK auto sector, especially when auto anchors are looking to replace models.
“Plants and jobs could be at risk if that uncertainty isn’t ‘riveted down’ as quickly in the form of clear parameters for a trade deal – and preferably one that is as in the neighbourhood of as possible to existing single market arrangements.”
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