In its report, the committee also stated that in case no deal between London and Brussels is achieved, it will put hundreds of thousands of UK jobs at risk, while non-tariff barriers with the EU, in the form of border delays and increased bureaucracy, will impede the country's competitiveness.
"We have not identified any potential benefits from regulatory divergence from the EU, whether in terms of competitiveness or improved access to new overseas markets. There are only costs," the report said.
The UK automotive sector employs 169,000 people directly and 814,000 people in associated supply chains throughout the country, while almost 86 percent of vehicles sold in the United Kingdom are imported, around 70 percent of which are from the rest of the European Union. In 2016, the UK industry made around $106 billion.
The report also highlighted that, since the most UK volume manufacturers were global and foreign-owned, any new bilateral trade deals would not lead to a significant increase in investment and jobs in the national car sector.
The committee also urged the government to keep the closest possible relationship with the existing EU regulatory and trading framework to give the country’s volume car manufacturing a chance to overcome the post-Brexit period.
"If the Government wishes to uphold the UK’s reputation as a good location for volume vehicle manufacturing, consistent with its Industrial Strategy, we recommend that it should in its negotiations on withdrawal place a high premium on securing the frictionless trade for the automotive sector," the parliamentarians highlighted.
Earlier on Thursday, European Council President Donald Tusk said that Brexit might result in the establishment of a hard border on the island of Ireland, the United Kingdom's only border with the EU.
On June 23, 2016, the United Kingdom voted in a referendum to leave the European Union. The negotiations between the United Kingdom and Brussels are due to be completed by the end of March 2019.
The bill that stipulates the United Kingdom’s withdrawal from the European Union sets 23:00 GMT March 29, 2019 as the exact time for the country’s exit from the bloc. The document will end the precedence of EU laws over UK legislation by repealing the 1972 European Communities Act, which formalizes London’s membership in the European Union.