The car giant BMW has followed plane maker Airbus in warning of the adverse consequences of Brexit.
BMW UK boss Ian Robertson says it needs clarity by the end of the summer. It makes the Mini and Rolls Royce and employs about 8,000 people in the UK.
Earlier, Airbus, which employs 14,000 people in the UK, warned it could leave if the UK exits the single market and customs union with no transition deal.
The UK government says it is confident of getting a good deal for industry.
The customs union brings together the EU’s 28 members in a duty-free area, in which they pay the same rate of duty on non-EU goods.
Prime Minister Theresa May has ruled out staying in the customs union. The UK is due to leave the EU on 29 March 2019.
Mr Robertson said he needed to know what the government’s preferred position was on customs and trade within months or his company – and the UK’s – competitive position could be harmed.
“If we don’t get clarity in the next couple of months we have to start making those contingency plans – which means investing money in systems that we might not need… which means making the UK less competitive than it is in a very competitive world right now,” he said.
He said it was a decisive issue that ultimately could damage his industry.
Airbus, in its Brexit “risk assessment” published on Thursday, said if the UK left the EU next year without a deal – meaning it left both the single market and customs union immediately and without any agreed transition – it would “lead to severe disruption and interruption of UK production”.
The European planemaker said the warning was not part of “project fear”, but was a “dawning reality”.
Airbus’s 14,000 UK staff are employed across 25 manufacturing sites, but about half are in Wales.
The company, which makes wings for the A320, A330/A340, A350 and A380 passenger planes in the UK, also said the current planned transition period, due to end in December 2020, was too short for it to make changes to its supply chain.
As a result, it would “refrain from extending” its UK supplier base. It said it currently had more than 4,000 suppliers in the UK.