Over 90% of British companies that work in the automotive sector want the UK to remain part of the European Union, according to a survey by the Society of Motor Manufacturers and Traders, and almost 70% of them believe that withdrawing from the EU would have a medium- to long-term negative impact on their business. However, SMMT members do want to see reform of the EU, with many of its regulations seen as too complex and likely to undermine international competitiveness.

The survey says that the main EU benefits are access to ‘the single market’, integrated supply chains, free movement of labour and the ability to influence harmonised technical regulations. The EU is also seen as an important bargaining force when it comes to global trade negotiations.

SMMT chief executive Mike Hawes said: “The position of the UK automotive industry is clear: being part of a strong European Union is critical for future success. This survey shows that Britain’s EU membership is fundamental to investment, growth and jobs in automotive companies of all sizes.

“The recent success of the UK automotive sector is due to its global competitiveness, which is enhanced by a supportive business environment at home and access to the huge single market. If we are to maintain this position and increase our access to growing global markets, the UK must play a key role in shaping EU policies, budgets and regulations. We must also increase our share of EU innovation funding to take advantage of our expertise in low-carbon and other automotive technologies.”

At a London news conference attended by leading politicians and business executives, John Leech, head of automotive at KPMG, said that EU membership had been key to agreeing recent export deals with China and other emerging markets.

“This shows just how important the EU is to the UK automotive market; it is a highly globalised industry and integrated within the EU. This integration gives global manufacturers with facilities in the UK access to European consumers. Our analysis shows that, for the automotive industry, it is not a question of the EU versus emerging markets; they want to do business with both.”

Meanwhile, the leader of the United Kingdom Independence Party has told The Financial Times that around half of British businesses want the UK to leave the EU. Nigel Farage criticised organisations such as the CBI, “which are letting down their members by calling for the country to remain in the EU”. He pointed out that the CBI has, in the past, supported Britain’s entry into the European Exchange Rate Mechanism and called for it to join the euro.