Brexit slashes car industry investment by half

Investment in the British car industry dropped 46.5 percent last year to 589 million British pounds (€673 million/$769 million), said the Society of Motor Manufacturers (SMMT).

Since the Brexit referendum in 2016, business groups have pressured the government to soften the economic impact of departing the European Union, citing a major downturn in investment. Thursday's figures are the lowest ever since SMMT began compiling the data.

Read more: German businesses watch Brexit with bated breath

What the report said:

• Car production fell by 9.1 percent to 1.52 million vehicles.
• Industry investment was cut by 46.5 percent.
• Output has continued to slump since the 2016 referendum.
• Brexit, along with "domestic and global downturns," are to blame.

Read more: Brexit vote defeat increases no-deal fears for UK car industry

'Permanent devastation'

SMMT Chief Executive Mike Hawes said:

• "Brexit uncertainty has already done enormous damage to output, investment and jobs."
• "Yet this is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the EU but with the many other global markets which we currently trade freely."

Read more: Hard Brexit could trigger 'massive crisis,' warns German industry

How important is the sector? The British automobile industry employs more than 850,000 people in the UK. It accounts for 12 percent of the total UK export of goods, according to SMMT. As such, it is considered "a vital part of the UK economy."

Crash out: Businesses have grown increasingly anxious over the prospect of the UK crashing out of the EU, especially after Brussels rejected the British government's attempts to reopen negotiations on the withdrawal agreement. For British businesses, losing access to the EU single market is expected to have a significant impact on market reach and growth. A government report in November said a no-deal Brexit could shrink the economy by up to 9.3 percent.

Read more: Opinion: Theresa May's 'Mission Impossible' in Brussels

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ls/aw (Reuters, AFP)