MOTORISTS face a 10 per cent rise in servicing costs if the UK leaves the EU on a no-deal basis, according to a report out today by the SMMT.
Commissioned from independent consultancy Frost & Sullivan, it claims that World Trade Organisation tariffs of between 2.5 and 4.5 per cent would cost car owners an additional £21 per year for replacement parts.
An additional £49 per year could also be added for quotas, subsidies, customs delays and regulatory barriers. The result of all this would be a £2.14bn increase in overall car maintenance costs in the UK.
Approximately 80 per cent of replacement car parts in Britain are imported, three-quarters of which come from EU-based suppliers. The SMMT also raised concerns over British-manufactured components exported to the EU facing tariffs.
The report says the UK automotive aftermarket sector’s turnover rose by 2.4 per cent last year to £21.6bn. Its contribution to the economy also increased by 2.5 per cent to £12.5bn, creating an extra 1,400 jobs, so the total number stands at 347,000.
Last year, UK motorists increased their spending on car maintenance by 1.7 per cent to an average of £707, due in part to the replacement of more high-tech components.
SMMT chief executive Mike Hawes said: ‘This report shows just how vital the UK automotive aftermarket is to our economy and society, supporting hundreds of thousands of jobs and keeping vehicles safe – and the country moving.
‘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.’
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