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How Will Brexit Impact the Automotive Industry Trade in the UK?

For the past couple of years, Brexit has been a major talking point within the automotive industry. There has been a lot of uncertainty over how the industry will be affected.

This was further intensified when Theresa May's latest deal was rejected, leading to an ever-increasing likelihood we'll be faced with a no deal scenario.

So, with what we know now, how could Brexit impact the automotive industry trade within the UK?

Used car values are increasing

One change that's already started in the industry, is the value of used cars is increasing. This largely applies to younger used cars and the increase in price is down to more people choosing to buy a used car over a newer one.

Brexit is having a number of implications on new cars in the UK. New cars being imported into the country will face a 10.6% tariff, which is understandably causing the industry to focus more on used models. The increase in price of used vehicles means buyers and sellers would benefit from carrying out professional valuations.

What would happen in a no deal Brexit scenario?

Before Theresa May stepped down as Prime minister, her latest Brexit deal was once again rejected. This meant it has taken the UK closer to a No Deal Brexit. This would be devastating for the automotive industry, potentially stopping production lines and causing major manufacturers to pull out of the UK.

Even the country's own auto manufacturers could be forced to close down some of their plants to account for the disruption to the industry. Car sales would also likely drop as manufacturers and dealerships would need to account for rising costs by passing them on to the consumer.

How it will impact imports and exports with Europe

While leaving the EU gives the UK the opportunity to strike up lucrative trade deals internationally, imports and exports within Europe will be significantly impacted. In 2018, 59% of cars manufactured in Britain were exported into the EU. However, after Brexit, there will be increased tariffs and trading will become much more difficult as a result. This could pose a major problem for the automotive industry.

Overall, regardless of what happens with Brexit now, it is likely to have a negative impact on the automotive industry. The uncertainty still surrounding Brexit is frustrating and angering the sector so the next prime minster is certainly going to have to focus on reassuring the industry and factor it into the Brexit negotiations.

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