More than half of in-market buyers inclined to buy British-built cars in case of no-deal Brexit
This is the latest report in a series of weekly updates for industry colleagues from Rachael Prasher, managing director of What Car? and Haymarket Automotive. Quoted poll data is from more than 1700 whatcar.com users.
There is now less than a month until the UK’s transition period with the European Union comes to an end. At the time of writing, trade negotiations still have not concluded and the UK faces the potential of a no-deal Brexit. For the automotive sector this is a grave concern, with a no-deal scenario potentially resulting in price rises for imported vehicles and supply delays.
The Society of Motor Manufacturers and Traders (SMMT) has predicted that under a ‘no- deal’ scenario with a 10% World Trading Organisation (WTO)-mandated import tariff, EU- built vehicle prices could rise by £1900 in the UK, while EU-built electric vehicles could face a price hike of £2800, due to their higher costs. The latter would effectively cancel out the current £3000 Plug-in Car Grant for EVs.
As part of our weekly industry study of 1728 in-market buyers, we looked at how UK buyers would respond to a Brexit price hike. The research found that, in the event of EU-built vehicles being hit with a price hike, 53% would be more inclined to buy British-built cars. While this is great news for the likes of Nissan, Vauxhall, Jaguar Land Rover and others with vehicle factories in the UK, it would seriously hurt manufacturers with production outside the country.
With changes to new vehicle pricing arriving potentially as early as 1 January 2021, our research found 34% of in-market buyers are considering bringing their vehicle purchase forward to avoid supply delays and cost hikes. This could see December registrations rising as a result.
The research also found that, in the case of a price increase, 25% would consider choosing fewer options on their next car, while 18% of buyers said they would go down a trim level to balance out the cost.
While Brexit remains a divisive issue, our research found that 87% of buyers are aware vehicle prices could go up as a result of a no-deal agreement, while 64% said they were concerned about supply delays and import tariffs on new EU-built vehicles.
As the industry emerges from the challenges posed by the Covid-19 pandemic, what our latest research shows is that retailers and consumers urgently need clarity around plans for the UK’s trading relationship with the EU in order for the industry to plan and adjust for the future.
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