As we all know, 23rd June 2016 was the fateful day of the Brexit announcement. The day when the British decided to leave the European Union and start afresh.
We want to help you understand how it could affect the motor industry, which generates £72 billion a year for UK coffers. So, we’ve written a simple guide to some of the key things you may want to know about Brexit.
New car sales are likely to get hit
On average, the UK creates around 1.7 million new cars every year. Over a half of which are shipped to Continental Europe. This represents 12% of the UK’s exports and makes the motor industry one of the UK’s largest exporters.
The big question is whether the terms of the UK’s exit will be agreed before 11pm on 29th March, 2019. This is the date the UK is formally expect to depart Europe.
The Society of Motor Manufacturers and Traders (SSMT) has stated that the nation risks losing a lot of new car sales if, indeed, the country leaves, which could cost the industry up to £4.5 billion.
The SSMT says that the UK government needs to maintain a good working relationship with our largest market and to negotiate a tariff-free deal that ensures that parts, products and investment can flow with ease. Estimates suggest that a 10% tariff will add £1.8 billion to the cost of new vehicles.
The UK motor industry relies heavily on the EU when it comes to the supply of car components. This is okay for now as the border crossing is currently hassle-free. However, after the changes are made, border-crossing could be restricted dramatically.
The impact of Brexit on motoring will be broad
For drivers all over the country, it has been estimated that car prices could go up by as much as £1,500. According to The Independent, “sales are predicted to decline by 5 to 6 per cent as the cost of new cars rises due to the dramatic slump in the value of the pound following the Brexit vote.”
It is anticipated that the price of fuel will increase. With the UK’s exit from Brexit, it’s expected to add an extra 18.7 pence to the price of a litre of petrol. If that happens, it would propel the UK to near the top of the list of the most expensive countries in which to buy fuel.
Insurance premiums for UK drivers will probably also go up. When traveling in Europe, British people will have no choice but to buy expensive specialist car insurance policies. Car factories are certain to close too. Toyota and Honda are considered the most likely to close theirs and move production overseas, which would obviously impact jobs.
In a comment that sent shivers throughout the automotive industry, London-based Evercore ISI analyst Arndt Ellinghorst stated that “Brexit adds further ballast to an already struggling ship.” So, all in all, it sounds as though we will all be holding onto our current cars for longer.
With the rising costs of motoring ahead, ensure the value of your car by getting its service or MOT. You can use our quick and easy online booking tool which is available 24/7. Just type in your VRM and postcode to instantly find the best garage for you!
Libby has been working for BookMyGarage since August 2017; writing articles, creating newsletters and handling the social media platforms. She works closely with ex-mechanics and subject matter experts to provide weekly blogs: essential advice on how to care for your car, need-to-know news and developments in the motoring world and helpful tips on how to cut the costs of running and maintaining your car.