The deal with Japan is Britain's first major trade pact following its exit from the European Union in January 2020, as it is yet to wrap up trade talks with the bloc, the United States, Australia and New Zealand.
Under the agreement, nearly all exports to Japan (99%) will benefit from tariff-free trade, and there will be more protection for goods with geographical indications, including Yorkshire Wensleydale and Welsh lamb.
Negotiations on the UK-Japan trade deal started earlier this summer, as the UK set its long term goal to become a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Eric-Mark Huitema, director general of the ACEA, said the "stakes are high" for automakers, and that a No Deal Brexit, combined with Coronavirus impacts, would be a "double whammy" for an "already reeling" sector.
The UK-Japan Comprehensive Economic Partnership Agreement was agreed in principle by International Trade Secretary Liz Truss and Japan's Foreign Minister Toshimitsu Motegi on a video call on Friday.
"Our industries are deeply integrated so we urge all parties to recognise the needs of this vital provider of jobs and economic prosperity, and pull out every single stop to secure an ambitious free trade deal now, before it is too late", Mike Hawes, SMMT Chief Executive, said. They also say that nothing can mitigate for the losses Britain would suffer in the event of a "no-deal" outcome with the EU.
"UK companies will profit from tariff-free commerce on 99 percent of exports to Japan", an announcement by the Department for International Trade stated.
Financial services firms, food producers, coat-makers and biscuit bakers - as well as cheese producers - would benefit from the agreement which represented an "important step" towards the United Kingdom joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in the Asia-Pacific region.
Britain said explicitly this week that it plans to break worldwide law by breaching parts of the Withdrawal Agreement treaty that it signed in January, when it formally left the bloc.
Even then, the talks haven't been as speedy or straightforward as initially hoped - which may not bode well for negotiations elsewhere.
Motegi said the talks had been hard "but we managed to reach an agreement in principle with extraordinary speed, in just three months".
The UK says that domestic manufacturers, financial services firms, food and drink producers, as well as tech companies will benefit from the tariff-free access to the Japanese market. Manufacturing parts coming from Japan will benefit from reduced tariffs, as will British pork, beef and salmon traveling in the opposite direction.
Japan is relatively a small market for us at the moment.