UPDATE 1-Britain's car industry overwhelmingly backs EU membership -survey

Wed Apr 2, 2014 8:42am EDT

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By Kate Holton and Brenda Goh

LONDON, April 2 (Reuters) - More than 90 percent of companies operating in the British car industry want the country to stay in the European Union, a survey showed on Wednesday, with access to the single market deemed fundamental to the sector's success.

The automotive industry has been one of the most vocal supporters of Britain's role in the EU since Prime Minister David Cameron threw membership into doubt with the promise of an in/out referendum by the end of 2017 if his party wins next year's national election.

Britain's car industry, which employs around 730,000 people in Britain and generates sales of almost 60 billion pounds ($100 billion) a year, enjoyed a renaissance in 2013, bucking a weak European trend to hit a six-year production high.

According to a survey by the Society of Motor Manufacturers and Traders (SMMT), 92 percent of companies in the industry believe membership of the 28-country bloc has been a key driver of that growth.

Seventy percent believe a withdrawal would damage their medium- to long-term futures.

"Being part of a strong Europe is critical for future success," SMMT Chief Executive Mike Hawes said in a statement.

Amongst the benefits to the industry are access to the single market, integrated supply chains, free movement of labour and the ability to influence regulations across the region.

Three percent of car firms said they would like to leave the EU, and the remaining 5 percent had no opinion.

FILLING THE POLITICAL VOID

A string of multinational employers operating in Britain, including financial services firms and planemaker Airbus as well as carmakers Ford and Nissan, have expressed concern at the prospect of Britain withdrawing from the EU.

Leading British figures including advertising industry heavyweight Martin Sorrell and Roger Carr, chairman of defence giant BAE, have also fronted the campaign - often filling a void left by politicians who have struggled to make the case for EU membership in the face of rising anti-EU rhetoric.

Much of the early debate has instead been led by Nigel Farage, the head of the anti-EU UK Independence Party (UKIP).

Joe Twyman, director of political and social research for Europe, Middle East and Africa at pollsters YouGov, said their research showed people were likely to make their decision based on which option would make them better off financially.

"So if you can make that economic argument, which is very very strong, then that is a powerful thing and who better, you could argue, to make that economic argument than businesses," he told Reuters.

At a London news conference attended by leading politicians and business executives, John Leech, head of Automotive at KPMG which helped produce the report, said EU membership had been key to agreeing export deals with China and other emerging markets.

"The EU's role in negotiating free trade agreements with emerging market partners is very important to the UK automotive industry," he said.

But SMMT members said they did want to see the EU reformed, with many regulations seen as too complex and likely to undermine international competitiveness.

"The greatest risk is to do nothing, is to give up on Europe, and simply accept anything that Europe chucks at us and to see Europe start to decline as a trading area of the world," Business and Enterprise Minister Michael Fallon told the event.

($1=0.6011 pounds) (Additional reporting by Kylie MacLellan; Writing by Kate Holton; Editing by Belinda Goldsmith and John Stonestreet)

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