Entire industry has stalled – and No Deal fears aren’t helping

Honda’s decision to shut down its plant in swindon after 30 years as a major local employer may not be directly motivated by Brexit but by wider problems in global car manufacturing.

However, yesterday’s move by the Japanese carmaker could hardly have come at a worse time.

no one in the industry doubts that uncertainty over Brexit is having a chilling effect on production. Fears surrounding our departure helped to halve fresh investment in the sector last year, according to the society of Motor Manufacturers and Traders.

overseas investors such as Honda have, in the past three decades, rebuilt the British car industry after it was driven to the brink of annihilation in the 1970s by rabid trade union activity. now they are in flight.

nissan is cancelling plans to build its new X-Trail sUV at its sunderland factory. Us giant Ford, which employs 13,000 workers in Britain, describes the potential consequences of no deal as ‘catastrophic’, while the boss of Jaguar Land Rover, which is cutting UK jobs, has issued a string of dire warnings. Brexiteers will, of course, accuse these firms of crying wolf. Maybe – but that doesn’t mean there are no wolves out there. and it is a tragedy that the very companies which helped to bring about a remarkable renaissance in the British car industry have become the collateral damage in the chaos of our impending departure from the EU.

It is yet one more problem to contend with in a troubled industry that faces plummeting demand for diesel cars, a slump in the vast Chinese market, and fears that donald Trump may impose punishing tariffs on vehicles imported into the Us.

In Germany, a country synonymous with the production of sleek, super-reliable driving machines sold worldwide, the decline in the auto industry is actually stalling the economy.

The industry is also dealing with the lifestyle choices of the Uber generation: citydwelling, environmentally-conscious young people who are less fixated on car ownership than their parents were.

so a state of emergency would prevail even without Brexit, and the threat of no deal makes us an even less attractive place to invest in troubled times.