Moody's said domestic demand in the UK would be unlikely to offset the profit pressures from tariffs, trade barriers and currency depreciation.
"The UK economic environment is already uncertain, and a no-deal Brexit would only exacerbate this further creating more challenges for carmakers," Tobias Wagner, senior credit officer at Moody's Investors Service said in a report published on Wednesday.
A no-deal Brexit outcome would hit the profits of all automakers building in the UK, including Jaguar Land Rover, BMW, Aston Martin, Nissan and Toyota, Moody’s said.
BMW, which builds the Mini hatchback in Oxford, England, along with engines for Mini and BMW models at Hams Hall near Birmingham, is most exposed of all European manufacturers to a no-deal Brexit, Moody’s said.
BMW Chief Financial Officer Nicolas Peter said last month that the automaker needs seamless, tariff-free trade for its just-in-time manufacturing system.
In September industry groups including the UK's SMMT, the European automakers association ACEA, European suppliers association CLEPA and Germany's VDA industry body warned that a disorderly Brexit would cost the sector 110 billion euros ($130 billion) in lost trade over the next five years.
A no-deal would have a “devastating impact” on the sector, SMMT CEO Mike Hawes said this week.
Bentley CEO Adrian Hallmark said a no-deal Brexit would be "extremely damaging" to the brand’s finances. "If you took the duties on components, 45 percent of the bits we buy in, and the 10 percent tariff on cars, worst-case scenario, it would take out a significant percentage of our profits," he told Reuters.
Hallmark estimated that a no-deal would cut Bentley’s profits by between 20 percent to 25 percent.
Daimler CEO Ola Kallenius told the Frankfurt business media club ICFW on Monday that a no-deal Brexit would cost his company hundreds of millions of euros.
Toyota and Nissan have been reported as saying said they will seek compensation from the UK if the government fails to agree a trade deal with the EU. Nissan has said its plant in Sunderland, northeast England, would be "unsustainable" if Britain fails to secure a deal.
The UK and the European Union resumed talks on Thursday. They are seeking a deal to put in place after the Brexit transition period ends on Dec. 31. The aim is to reach an agreement by the middle of November, officials said.