After three years of turmoil, Brexit is finally entering its endgame – hopefully. Although Britain’s final relationship with the European Union (EU) is yet to be decided, car manufacturers have started staking out their responses to a variety of different outcomes.
As the most damaging option, firms have naturally focused on ‘no deal’ or an otherwise ‘hard’ Brexit, which could trigger changes to their pricing structures. If Britain leaves the EU without a deal or a sufficient free trade agreement, the UK could find itself subject to significant tariffs, disrupting manufacturers’ supply chains and potentially being passed onto the consumer in higher list prices.
Crucially, this may even apply on cars ordered before the official exit date, as companies seek to protect profit margins in response to rising costs. Not all manufacturers intend to handle this the same way, however, with costs to the company and consumer varying widely between different brands. Here is what those who responded to requests for comment have said:
BMW and Mini: Tariffs not passed on
BMW and Mini are offering price protection for orders placed on and before 31 October or whatever date Britain leaves the EU. BMW has confirmed that this offer encompasses any tariffs, so even if the UK were leave without a deal, BMW and Mini buyers would be protected from any and all price increases.
Jaguar and Land Rover: Tariffs not passed on
Jaguar has confirmed it will not backdate tariff costs on cars that are registered before 31 December, guaranteeing prices at that date. This is slightly different to guaranteeing prices at the point of order, since registration can be delayed until significantly after the order date. It appears that cars ordered very close to the EU exit date may risk not being protected by the offer, making their buyers vulnerable to extra bills. It's likely that a similar guarantee will be available from Land Rover.
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Any excuse to raise prices
and blame the politics....
Why can't we just leave. If, 3+ years on, the manufacturers haven't put supply chain options in place to counter tariffs then f**k 'em. The whole policy of building stuff in one place from bits made all over the EU smacks of social engineering on a grand scale, it's like 60's/70's Britain scaled up... think Linwood, Speke supplying the Midlands heartlands then.
Airbus is the greatest example of this, what is the financial and environmental cost of building wings in Wales and shipping them by barge or beluga to France to be mated to bits from Spain and elsewhere?
I know of a business in North Wales that ships rubber grommets to the EU to be applied to wiring looms that are shiped back to Halewood to be fitted to JLR cars, why cant the Welsh company ship the grommets direct? A distance of 30 miles compared to over 1000?
Madness..................................
What a misleading article!
The 'Tariffs passed on' or Tariffs not passed on' commentary only applies to orders placed before 31st October, not orders placed after Brexit date.
WTO tarriffs of 10% will NOT be absorbed by manufacturers for anything other than the very short-term. Many will hike prices immediately and not price-protect orders already placed.
These are major price increases! If you are financing a £30k car over 4 years, the increase in your monthly payments will be £62.50 per month before adding interest costs.
Still want to leave?
Ostrich time!!!
Don't listen to the rhetoric, Brexit isn't going to be good for the majority of us, it isn't going to be dire, but let's not be kidded here, it's going to take a few years before we step out of the metaphorical quagmire onto dry firm ground and slowly build our economy again....