The UK’s motor industry may have avoided no-deal tariffs but it still faces a lot of uncertainty and costs because of the ‘thin’ Brexit deal.
That’s according to the Vehicle Remarketing Association, which is warning that there are many unanswered questions that could have serious implications.
The trade organisation says several key points about the future of manufacturing and cross-border vehicle movement are still vague or undefined.
‘Any deal is good news because it avoids the kind of tariffs that would’ve been attached to no deal. It is something that should be a huge cause for relief,’ said VRA chairwoman Sam Watkins.
‘However, the deal that we now have raises as many questions as it answers.
‘It is generally being described as “thin” and that is accurate in that there are several areas where there is very little detail for the motor industry or remarketing.
‘We are probably entering into a process now where those points are going to be worked through, but it seems that some will be easier to resolve than others.’
She added it was hoped that near-term investments in manufacturing, such as the new Nissan Qashqai in Sunderland, would go ahead.
‘The threat of motor manufacturing in the UK potentially unravelling overnight has been removed, and this should mean that there is no immediate question mark over UK factories and supply chains.
‘However, looking ahead, substantial costs have been added in terms of the new customs arrangements, and the regulatory background against which car makers operate is unclear in several important areas.
‘Presumably, these will be clarified in the coming months and years, but it does perpetuate an effect that has been present ever since the Brexit referendum – that it is difficult to make plans and for investment decisions to be finalised without all of the facts available. There remains a lot of uncertainty.’
She highlighted special difficulties about the rules of origin arrangements, which could have implications for EV manufacturing in the UK.
‘It’s quite difficult to separate the negative effects of the pandemic and Brexit, but getting hold of a number of popular new models is almost certainly going to be tricky in 2021.
‘For a motor industry that finished last year around 30 per cent down in new car sales compared to 2019, this is not good news, and there will be knock-on effects for the used sector that will persist into the medium term.
‘Specifically, the reduced numbers of vehicles entering the market will mean that getting hold of the stock needed by used retailers is going to remain difficult and the situation may even worsen compared to the last few months.
‘However, if 2020 has underlined anything, it is that the used car sector is incredibly flexible and innovative, and that people will continue to want to buy despite substantial practical barriers in their way.’