Servicing costs to rise by ten per cent if no Brexit deal is made, trade warns

Motor industry calls on government to put automotive at the heart of Brexit agenda

Servicing costs to rise by ten per cent if no Brexit deal is made, trade warns
Last year, UK motorists increased their spending on car maintenance by 1.7 per cent to an average of £707.

British motorists could see their annual car service and repair costs rise by ten per cent to £777 after Brexit if no deal is reached between the UK and the EU.

A new report published this week 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 per cent 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.

‘Significant increase’

Mike Hawes, SMMT chief executive, said: “Our car maintenance sector is one of Europe’s most competitive, and motorists enjoy a great choice over where they have their cars serviced.

“However, if we don’t secure a new trading relationship with the EU that is free of tariffs and customs checks, British consumers could face significant increases to their annual car repair bill due to new tariffs and other trade barriers.

“Government must now prioritise an interim arrangement that maintains single market and customs union membership until the right trade deal with the EU is implemented.”

Imported parts

Some 80 per cent 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.

Risk to the UK economy

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 per cent to £21.6 billion, while raising its contribution to the economy by 2.5 per cent to £12.5 billion and creating an additional 1,400 extra jobs.

The report found the UK’s car servicing and repair sector grew again in 2016, with turnover rising 2.4 per cent to £21.6 billion.

Servicing and repair

Last year, UK motorists increased their spending on car maintenance by 1.7 per cent to an average of £707.

This was due, in part, to the replacement of more high tech components, which require new skills and equipment to fit.

While tyres, lubricants and filters are still the most commonly replaced items, Frost & Sullivan research shows that demand is rising fastest for telematics devices and tyre pressure monitoring sensors.

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