Click the thumbs up >The UK’s automotive trade body, the Society of Motor Manufacturers and Traders (SMMT), is calling on the UK Parliament to ratify the Brexit trade agreement.
MPs are debating the draft deal with the EU today (Wednesday, December 30) after Parliament was recalled to put the deal into law, a day before the UK severs ties with the European Union.
The SMMT wants the immediate ratification of the draft UK-EU Trade and Cooperation agreement (TCA), to ensure all automotive companies benefit from continued tariff-free trade from January 1.
It says that the draft TCA delivers across several areas for UK automotive, keeping the sector connected to a market that accounts for eight out of 10 of its vehicle exports.
Despite the trade deal recently reached between the UK and the European Union, the British automotive industry has already suffered irreversible damage.
Before the deal was reached, Nissan opted against building the upcoming all-electric Ariya SUV in the UK, and two years ago ditched plans to build another SUV at its Northern England factory. Honda will also close its only factory in the UK and BMW has delayed work on a next-generation Mini platform and may ultimately decide to build future Mini models in Germany or China.
As part of the trade deal, petrol and diesel vehicles need to be made with at least 55 per cent local content to avoid tariffs. Additionally, EVs and hybrids will need 40 per cent local content, 10 per cent more than what the UK had sought, and until 2023, batteries can have as much as 70 per cent overseas content. However, from 2024-2026, batteries can only have 50 per cent overseas content while EVs and hybrids can have 55 per cent foreign content,
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Automakers including Nissan Motor might struggle to qualify some U.K.-assembled models for tariff-free export to the EU as they evaluate their local sourcing.
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An eleventh-hour post-Brexit trade deal struck between the UK and the EU has been welcomed by the fleet and leasing industry.
It had faced a significant rise in costs, with tariffs imposed on cars and vans, if no deal had been agreed when the UK exits EU trading rules on Thursday (December 31).
However, while business will now have to adapt to the new trading rules and work through the detail of the deal, the expected hike in vehicle prices of several thousand pounds has been avoided.
Gerry Keaney, chief executive of the British Vehicle Rental and Leasing Association (BVRLA), said that the Brexit trade deal comes as a “big relief” for the industry and provides a “welcome boost” for the UK automotive sector, which can now plan with more “confidence and certainty”.