Auto Investment in U.K. Skids on Brexit Worries

Carmakers have slashed their annual investments in the British auto industry by 50% over the past two years, says the Society of Motor Manufacturers and Traders.

SMMT says investment shrank to £1.1 billion ($1.6 billion) last year from £1.7 billion in 2016 and £2.5 billion in 2015.

The trade group blames the decline on uncertainty about the economic outcome of the U.K.’s plan to exit the EU in March 2019. Chief Executive Mike Hawes says companies are “waiting as long as they can.”

British consumers are showing signs of caution too. Last year domestic car sales dropped 6% to 2.5 million vehicles—the first downturn in six years. SMMT predicts a further decline in deliveries of at least 5% in 2018.

About 80% of the cars made in the U.K. are exported, with Europe being the largest overseas market. Last year output for export slipped 1% to 1.3 million vehicles, according to SMMT. But production for the local market plunged 10% to 336,600 units.​​​​​