LONDON -- British annual car production will drop by a third to 1 million by 2024 if Brexit leads to tariffs with the European Union, the SMMT industry body warned.
UK production would be lost to other countries, the association said.
Britons head to the polls in just over two weeks to elect a new government with Prime Minister Boris Johnson promising to pass his Brexit deal as soon as possible, while the opposition Labour Party would renegotiate and call a referendum in 2020.
The SMMT said the next UK government needs to deliver a "world-beating Brexit trade deal" to maintain the industry's competitiveness after the UK quits the EU.
The association listed its priorities for a new government ahead of the general election on Dec. 12.
Automakers' key requirements include a frictionless border, tariff-free trade and regulatory alignment.
The SMMT said World Trade Organization tariffs on components imported into Britain and exported vehicles would add more than 3.2 billion pounds ($4 billion) a year to manufacturing costs in the worst case scenario.
Production was 1.5 million cars in Britain last year but has fallen by 16 percent so far this year, hit by a slump in demand for diesel vehicles, falling sales in China and a hit to consumer confidence due to Brexit uncertainty.
"By 2024, falling demand and model reallocation to more competitive and welcoming production locations would see annual output falling to just 1 million vehicles per year," the SMMT said.
The auto sector is Britain's biggest exporter of goods.
The SMMT said a close trading relationship will be key to unlocking investment in vital zero-carbon technology.
"The automotive sector is going through a period of unprecedented change and we must not let the pressure of Brexit deflect from our focus on a coherent national industrial strategy," SMMT President George Gillespie said. "Collaboration between industry and government must be stronger than ever."
Automakers have spent more than 500 million pounds preparing for Brexit, with Nissan last month issuing the starkest warning yet against a no-deal scenario, saying tariffs on exports to the EU would most likely to render its UK operations unviable. Nissan has said it will not build X-Trails SUVs at its Sunderland plant in northeastern England.
Honda has said it will close its UK factory in Swindon, which builds Civic hatchbacks. Ford is shuttering its Bridgend engine plant in Wales. PSA has said a decision to keep open its Vauxhall factory in Ellesmere Port, northwest England, is dependent on the final terms of Brexit. French unions are proposing factories in France for Vauxhall production if there is a no-deal Brexit.
An election victory for Johnson may lead Britain to quit the EU on Jan. 31, triggering detailed trade talks.
Johnson would have just 11 months to secure a subsequent trade arrangement. Unless he wins a large majority, that means there is still scope for rebel lawmakers from his own Conservative Party to try to force through a harder Brexit.
Bloomberg contributed to this report
