List prices for new cars could rise by £1,500 if the UK fails to secure tariff-free trade deals during Brexit negotiations according to the Society of Motor Manufacturers Traders (SMMT).
New SMMT analysis suggests EU tariffs on cars could add at least £2.7 billion a year to imports and £1.8 billion to exports.
And it's predicted import tariffs alone could push up the price consumers pay for new vehicles imported to the UK from the continent if brands and retail networks cannot absorb the additional costs.
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The concerns prompted SMMT president Gareth Jones to call on Government to "make the right the right decisions" to protect the automotive sector that has seen record growth in recent years.
The latest SMMT production figures show UK car makers are on track to set a new record for exports and beat production volumes achieved last year.
And speaking in front of more than 1,000 industry executives and Government officials at the SMMT's 100th annual dinner, Jones said: "The Government has – commendably – put industrial strategy at the heart of business and the department for business. It does so as it faces its toughest challenge – leaving the EU. We must make the right decisions: on trade, on regulations and on business competitiveness."
High tech manufacturing investment needed
To help the industry continue to grow even in the face of uncertain times, a new report published by the SMMT says it is time to invest in digital manufacturing - often known as the fourth industrial revolution - to unlock more than £70 billion for the economy.
A report, commissioned from KPMG, said technologies such as intelligent robotics, 3D-printing and artificial intelligence, combined with new approaches to data management can increase productivity and reduce waste and expense.
The estimated financial benefit for the automotive sector by embracing this movement is £6.9 billion every year by 2035, with a cumulative boost to the wider economy of some £74 billion.
SMMT chief executive Mike Hawes added: "Significant capital investment will be necessary and we must put digitalisation at the heart of the UK's industrial strategy to ensure we are equipped with the right skills, infrastructure and standards.
"The competition from other countries is intense, so we should follow the model that is proving so successful in the development of low emission and connected and autonomous vehicles in the UK, with a collaborative approach between government and industry."
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