Over 90% of companies in industry-commissioned survey say exit from the European Union would be bad for business

This article is more than 6 years old

This article is more than 6 years old

Britain's car industry has expressed its overwhelming opposition to a UK exit from the European Union, saying EU membership is crucial for jobs, investment and growth.

Over 90% of companies in the £60bn sector believe staying in the EU would be the best for their business, according to a report by KPMG commissioned by the Society of Motor Manufacturers and Traders (SMMT).

Mike Hawes, SMMT chief executive, said: "The position of the UK automotive industry is clear: being part of a strong Europe is critical for future success.

"This report, and our member survey, shows that Britain's EU membership is fundamental to investment, growth and jobs in automotive companies of all sizes."

The SMMT said the recent success of the UK car industry had been boosted by its access to the single market.

Car manufacturing in Britain rose to a six-year high, of 1.51m vehicles, in 2013, an annual increase of 3.1%. The number of new cars sold increased by 10.8%, to 2.26m.

Hawes said: "If we are to maintain this position and increase access to growing global markets, the UK must play a key role in shaping EU policies, budgets and regulations."

Almost 70% of companies surveyed said a British exit from the EU would had a negative impact on their business over the medium to longer term.

Michael Fallon, business minister and Conservative MP, said there was no evidence that his party's proposed referendum on EU membership was causing uncertainty among businesses.

"I have not come across the uncertainty as industry minister," he said. "I have not seen any threat to investment. We continue to be one of the major centres for foreign direct investment. We get more of it into the UK than any other country in Europe, and we wouldn't get that if people thought we were on the verge of leaving.

"The only proof of that uncertainty would be if investment started to slow down or fall away. There's no evidence of that whatsoever."

SMMT members said one of the major benefits to industry of belonging to the EU was the ability to move people around easily and deploy skills across the region to meet local needs at short notice.

"The automotive businesses we spoke to also see the EU as an important bargaining force in global trade negotiations," said John Leech, KPMG's UK head of automotive.

"Moreover, research and development, which is vital to the UK's ability to be at the forefront of innovation in car manufacturing, is both heavily funded by the EU and requires access to the expertise and free movement of skilled engineers within the EU".

Many SMMT members felt EU reform was needed to remove EU regulations, which they said were burdensome and threatened to undermine international competitiveness.