Motor companies have given strong backing for the UK staying in the European Union, citing benefits including business links and free movement of labour.
A survey by the Society of Motor Manufacturers and Traders (SMMT) showed that 92% of automotive firms believed that staying in the EU would be best for their business, although most wanted to see reforms.
The SMMT said its study showed how EU membership benefited the industry, such as access to a single market and funding for research and development.
The research among around 130 companies, including car and van manufacturers and component firms, showed that 70% believed withdrawing from Europe would negatively affect their business.
Mike Hawes, chief executive of the SMMT, said: "The position of the UK automotive industry is clear - being part of a strong Europe is critical for future success.
"This report shows that Britain's EU membership is fundamental to investment, growth and jobs in automotive companies of all sizes. The recent success of the UK automotive sector is due to its global competitiveness; competitiveness that is enhanced by a supportive business environment at home and access to the huge single market.
"If we are to maintain this position and increase access to growing global markets, the UK must play a key role in shaping EU policies, budgets and regulations.
"We must also increase our share of EU innovation funding to take advantage of the expertise the UK has in low carbon and other automotive technologies and secure the long-term future of the automotive business in the UK."
John Leech of KPMG, which produced the report, added: "Our report shows just how important the EU is to the UK automotive market - it is a highly globalised industry and integrated within the EU.
"This integration gives global manufacturers with facilities in the UK, for example, access to European consumers. Our analysis shows that, for the automotive industry, it is not a question of the EU versus emerging markets; they want to do business with both.
"The automotive businesses we spoke to also see the EU as an important bargaining force in global trade negotiations. Moreover, research and development, which is vital to the UK's ability to be at the forefront of innovation in car manufacturing, is both heavily funded by the EU and requires access to the expertise and free movement of skilled engineers within the EU.
"While our report outlines the importance of EU membership to the UK automotive industry, it also poses some challenges to the sector. There is a clear demand for regulatory reform and consistent application of regulation so that complexity can be reduced."
Around 700,000 jobs depend on the automotive industry in the UK.