Car industry calls for transitional Brexit deal or risk falling off a "cliff edge" and damaging future prospects

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SMMT's boss said removing tariff-free trade immediately will harm the UK car industry (Source: Getty)

Britain's car industry has once more called on the government for reassurance over Brexit, saying a transitional deal to leave the European Union is imperative to stop the automotive sector falling off a "cliff edge".

Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), said businesses were still frustrated at the lack of guidance from government.

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"It is time to stop playing with words," he said. "Soft or hard Brexit and now open mean nothing. It's time to be brutally honest; our sector needs a comprehensive and bespoke trade agreement."

The SMMT is sceptical as to whether Britain will reach a final agreement with the EU by the March 2019 deadline, meaning car firms could face a "cliff edge" where tariff-free trade is suddenly taken away. Without something to ease the change, it warned, the industry will suffer.

"We accept that we are leaving the European Union," Hawes said in his keynote address at the SMMT's annual summit today. "But our biggest fear is that, in two years' time, we fall off a cliff edge - no deal, outside the single market and customs union and trading on inferior World Trade Organisation terms. This would undermine our competitiveness and our ability to attract the investment that is critical to future growth."

The SMMT wants an interim agreement for the UK to stay in the Single Market and customs union until a new relationship has been confirmed.

"We have asked for clarity and certainty," Hawes said. "The General Election has not brought that clarity. It has added confusion."

The EU is the UK's biggest automotive export market, accounting for more than half of all UK car exports. And UK car plants rely on the free movement of parts to and from the continent. 

Some 80 per cent of the 1.7m cars built each year in Britain are exported.

Last year, UK automotive manufacturers turned over £77.5bn, the highest on record and the seventh consecutive year of growth, according to the SMMT.

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