The automotive sector will be at the front of Brexit negotiations because it accounts for an eighth of British goods exports

The British car industry faces “death by a thousand cuts” if leaving the European Union raises costs, the head of its trade association has warned.

Mike Hawes, chief executive of the Society of Motor Manufacturers & Traders, said that if manufacturers invested elsewhere in Europe the industry could find itself in a spiral of decline.

He told a House of Lords committee that he welcomed government assurances that led Nissan to commit to build its next generation of Qashqai cars in Sunderland, but added that the threats to the industry remained.

“If a decision was taken not to build model X in that particular plant, or potentially it was going to be split between two sites, then production capacity will go down,” he said. “Your