The car industry body has urged Theresa May to ditch talk of a "no-deal" Brexit, saying it would lead to £5bn tariffs for a sector that is already in trouble.
The Society of Motor Manufacturers and Traders (SMMT) said a no-deal Brexit – in which the UK would crash out of the EU on terms set by the World Trading Organisation – was "not an option" for the sector and that the £5bn tariffs was "just the tip of the iceberg".
The trade body warned that UK buyers of cars and vans from the EU face an additional bill of between £1,500 and £1,700 as import tariffs would push up the cost of cars.
Mike Hawes, SMMT chief executive, said: “Tariffs alone should be enough to focus minds on sealing a withdrawal agreement between the EU and UK but the potential impact of ‘no-deal’ means the stakes for the automotive sector are far higher.
"Without a deal, there can be no transition period and the complex issues surrounding tariffs and trade, customs, regulation and access to talent will remain unresolved."
The SMMT's intervention comes as it meets EU representatives in Brussels today in which it will seek to hammer home the economic importance of an integrated European automotive industry while highlighting the consequences if no deal was struck.
The UK is the EU’s second largest new car market, worth £29bn to EU manufacturers every year, turning over £82bn and supporting over £850,000 jobs.
The SMMT said seven out of every 10 cars registered by UK motorists come from factories in Europe, while car plants in the UK send more than 40 per cent of their output to Europe.
It also warned that customs checks would slow down the delivery of around £34m worth of car parts, many of which come into the UK and vice versa without customs checks.
"Without a withdrawal agreement, on 30 March 2019 this trade will, as a minimum, be severely disrupted – potentially halting production, undermining competitiveness and negatively impacting the industry in the UK and Europe," the trade body said.