The UK motor industry will face a skills shortage if access to the single market is restricted following Brexit, according to the SMMT.

Warning that UK-based manufacturers rely on hiring workers from the rest of Europe to cover a domestic skills gap, particularly in engineers, chief executive Mike Hawes, speaking at the SMMT’s International Automotive Summit on 29 June, claimed: “There is a clear will amongst business to have access to the single market.”

He said most SMMT members hire non-UK nationals. “They are not replacing UK jobs but supplementing those we have,” he explained.

Hawes credited trade deals with European Union members as driving growth in the UK motor industry to record levels – revenues were up 7.3% year-on-year in 2015 to £71bn while vehicle production increased 5% to 1.7m, including the 60,280 Vivaro vans Vauxhall manufactured in Luton. The Vivaro is based on the Renault Trafic and results from a longstanding agreement between Opel/Vauxhall and the French brand.

The SMMT claimed “unrestricted access to the single market, input to EU legislation to safeguard the interests of UK automotive and the ability to recruit talent from abroad”, was responsible for the strength of the UK automotive sector.

Hawes warned the industry now faced a period of uncertainty and economic instability with an “impact on cost, investment and ease of business”.

“We are deeply integrated within the EU, it’s the single most important relationship we have as an industry.”

As for the future, he said: “It comes down to consumer confidence, it’s a wait and see.”

However, he claimed “the automotive industry is front of mind” with both the Government and opposition despite the current turmoil.

Sajid Javid, secretary of state for Business, Innovation and Skills, acknowledged that most SMMT members, from multi-nationals to small suppliers, were unambiguous in their support for remaining in the EU.

“Tariff-free access to markets is important to the UK auto industry,” he said.

But Dr Stephen Woolcock, a senior lecturer in international relations at the London School of Ecomomics, stressed: “Trade is shaped by reciprocal  access,” and warned Brexit had thrown UK supply chains from the EU into uncertainty.

He added: “The UK may become a rule taker not a rule shaper, it will have to accept EU trade rules without having an impact on them.”