VRA concerned about lack of detail from Brexit deal
04 January 2021
Author: Sean Keywood
The new Brexit trade deal leaves many unanswered questions that could have serious implications for the UK motor industry, according to the Vehicle Remarketing Association (VRA).
The trade organisation argues that there are several key points around the future of manufacturing and the cross-border movement of vehicles which remain vague or undefined.
VRA chair Sam Watkins said: "Let's be clear on this - any deal is good news because it avoids the kind of tariffs that would've been attached to no deal. It is something that should be a huge cause for relief.
"However, the deal that we now have raises as many questions as it answers. It is generally being described as 'thin' and that is accurate in that there are several areas where there is very little detail for the motor industry or remarketing.
"We are probably entering into a process now where those points are going to be worked through but it seems that some will be easier to resolve than others."
Watkins said she hoped that the degree of certainty now present would enable near-term investments in manufacturing, such as the new Nissan Qashqai in Sunderland, to go ahead.
She added: "The threat of motor manufacturing in the UK potentially unravelling overnight has been removed, and this should mean that there is no immediate question mark over UK factories and supply chains.
"However, looking ahead, substantial costs have been added in terms of the new customs arrangements, and the regulatory background against which car makers operate is unclear in several important areas.
"Presumably, these will be clarified in the coming months and years but it does perpetuate an effect that has been present ever since the Brexit referendum - that it is difficult to make plans and for investment decisions to be finalised without all of the facts available. There remains a lot of uncertainty."
Watkins fears the most immediate effect of Brexit on the used vehicle sector and remarketing will be disruption to vehicle supply.
"It's quite difficult to separate the negative effects of the pandemic and Brexit but getting hold of a number of popular new models is almost certainly going to be tricky in 2021.
"For a motor industry that has finished last year around 30% down in new car sales compared to 2019, this is not good news, and there will be knock-on effects for the used sector that will persist into the medium term.
"Specifically, the reduced numbers of vehicles entering the market will mean that getting hold of the stock needed by used retailers is going to remain difficult and the situation may even worsen compared to the last few months.
"However, if 2020 has underlined anything, it is that the used car sector is incredibly flexible and innovative, and that people will continue to want to buy despite substantial practical barriers in their way."