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The British car industry has commissioned a research study which it believes will support the UK’s continued membership of the EU, which it says is crucial for car making to flourish in this country.

Employing 700,000 people and with an annual turnover of around £40bn, the car industry is a significant economic driver in the UK.

Manufacturers such as Nissan say they will have to reconsider their continued investment in the UK if the country exits the European Single Market. Nissan’s Sunderland plant manufactures over 500,000 vehicles each year, shipping the majority to mainland Europe.

Toyota, too, has outlined how important EU membership was when the Japanese company initially invested in Britain, and how that membership continues to be crucial.

With a possible referendum on European Union membership in 2017, the issue is increasingly of concern to the UK car industry. Membership of the free market ensures the free movement of labour and parts, and ensures that no import or export taxes are imposed. Exiting the EU, it is feared, may increase production costs to an unsustainable level.

The British car industry enjoyed a six-year production high in 2013.

A recent report in the Financial Times suggested that members of the UK’s car manufacturing trade association and lobby group, the Society for Motor Manufacturers and Traders (SMMT), strongly oppose an EU exit.

The Prime Minister David Cameron has promised a referendum on continued European Union membership by the end of 2017 if the Conservatives win the next election. Current polls suggest if a vote took place now the UK would opt to leave the union.

Would an EU exit cause the UK’s vehicle production industry to break down? Let us know your thoughts below.