No-deal Brexit could cost RM28b in car tariffs

By BLOOMBERG

BRUSSELS • A so-called Brexit without a trade deal between the UK and the European Union (EU) could cost the car industry and consumers at least €5.7 billion (RM27.74 billion) a year in vehicle tariffs, according to a report by a British industry group.

The Society of Motor Manufacturers and Traders (SMMT) said yesterday the estimate is based on levies of 10% on cars exports and imports from an industry that could also suffer production halts due to the split.

“Brexit is the major challenge that we have,” Mike Hawes, head of the SMMT told reporters in Brussels.

“What we need to insure is that come November there is a withdrawal agreement because we cannot afford no-deal Brexit, that is the worst of the imaginable options for this industry.”

The findings on Brexit for the car sector is one in a string of recent pleas from business to politicians who are spearheading talks aimed at breaking a deadlock on Brexit. The UK and the EU signalled their readiness to work on getting a deal as Prime Minister Theresa May prepared for a crucial summit aiming to persuade EU leaders to back her plans.

If passed directly on to consumers, import tariffs would push up the cost of UK-built cars sold in the EU by an average €3,000, while UK buyers of a car from the EU would be faced with €1.700-increase if manufacturers and their dealer networks were unable to absorb additional costs, according to the a report by the lobby.