New investment in the UK car industry has suffered a steep decline, according to the Society for Motor Manufacturers and Traders (SMMT).
Investment fell to just £90m in the first six months of the year from £347m last year.
In contrast, firms’ spending on contingency plans for a possible no-deal Brexit has now reached a minimum of £330m.
UK vehicle production fell by a fifth in the first half of the year.
During this time, 666,521 new cars rolled off production lines, compared to 834,573 during the same period in 2018.
While some manufacturers have brought forward their annual summer shutdowns, the SMMT warns the output has now been falling for 13 consecutive months, and the underlying trend remains sharply downward.
“Fear of no-deal”
Speaking to the BBC, SMMT chief executive Mike Hawes said: “Over the last seven years the UK automotive industry was a real success story.
“We were averaging something like £2.5bn per annum.
“In the first six months of this year, it’s not been half of that £2.5bn.
“It’s £90m. It’s been a massive drop off, because we have that fear of no-deal.
“The fear of no-deal is causing investors to hold back and wait and see what’s going to happen.”
Last week, Mr Hawes wrote to the new Prime Minister, Boris Johnson, urging him to reach a deal with the EU that allows parts and finished cars to cross borders freely, without being subject to tariffs or onerous customs controls.
A no-deal Brexit, he warned, would be an “existential threat” to the industry, and simply should not be an option.
A spokesperson for the Department for Business, Energy and Industrial Strategy said: “The UK automotive industry remains one of our great success stories.
“We are at the forefront of designing and manufacturing cutting-edge vehicles, and we continue to talk to industry, including the automotive sector, in the run-up to exit day to ensure they are prepared and can maximise the opportunities of our exit from the EU.”
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