A new report by the PA Consulting Group (hwww.paconsulting.com) says that the UK automotive sector is facing two large challenges. The first concerns a period of uncertainty during Brexit talks between the UK and the EU. The report warns that the formal negotiations may not start until well into next year and could continue into 2019. This may prompt car makers to place important work on model upgrades with their operations elsewhere in the world.

The second concern is that, if these car makers consider the UK’s access to the EU single market after Brexit to be inadequate, then some of their UK factories could be closed. The Financial Times says that Toyota is unlikely to make any new investment in the UK until there is clarity on tariffs with the EU.

However, Stephen Booth, a director of the Open Europe (openeurope.org.uk) ‘think tank’, predicts that there will be a tariff-free trade agreement between the UK and the EU. “Given that it’s likely that the UK will have tariff-free access, we would expect the UK car industry to cope over the long term.”