Sunday, May 26, 2024
HomeNEWSINTERNATIONALbrexit car costs warning

brexit car costs warning

British motorists could see their annual car service and repair costs rise by 10% to £777 after Brexit if no deal is reached between the UK and the EU. A report published today by the Society of Motor Manufacturers and Traders (SMMT) shows that the UK’s collective car repair bill could rise by more than £2 billion if tariffs and other barriers to trade are imposed.

The Importance of the Aftermarket to the UK Economy 2017, commissioned from independent consultancy Frost & Sullivan, reveals that a 2.5%-4.5% World Trade Organisation (WTO) tariff on imported car parts would cost the average car owner an extra £21 a year for replacement components. Meanwhile, quotas, subsidies, customs delays and regulatory barriers could add an additional £49, resulting in a £2.14 billion rise in the UK’s collective car maintenance bill.

Some 80% of replacement car parts fitted to British cars are imported, with almost three quarters of these coming from EU-based suppliers. However, the manufacture of components in the UK is growing, making the risk of tariffs on British products sold in Europe and other key global markets another major concern. The report concludes that WTO tariffs on automotive parts exported from the UK could cost the domestic industry up to £3 billion in lost revenue, with a potential impact on future investment and jobs.

The report highlights the risk to an industry, which makes a significant contribution to the UK economy. In 2016 the UK automotive aftermarket sector, which includes parts makers, distributors, retailers and workshops, grew its turnover by 2.4% to £21.6 billion, while raising its contribution to the economy by 2.5% to £12.5 billion and creating an additional 1400 extra jobs. The total number of jobs supported by the sector now stands at some 347,000 – more than the population of Coventry.

RELATED ARTICLES

Product News

Government to extend ICE ban?

According to a recent report in the Daily Telegraph (12 May), the government is to extend its deadline on the sale of petrol-powered motorcycles...