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Post-Brexit tariffs and trade barriers could add 10% to car servicing bills warns SMMT

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Post-Brexit tariffs and trade barriers could add 10% to UK car servicing bills, costing car owners an extra £70 per service, according to research published by the SMMT.

The SMMT’s Importance of the Aftermarket to the UK Economy 2017 report, commissioned from independent consultancy Frost & Sullivan, found that motorists’ average annual car service and repair costs could rise by 10% to £777 after Brexit if no deal is reached between the UK and the EU.

The UK’s collective car repair bill could rise by more than £2 billion if tariffs and other barriers to trade are imposed, the report said.

Mike Hawes, SMMT chief executive, said: “Our car maintenance sector is one of Europe’s most competitive, and motorists enjoy a great choice over where they have their cars serviced.

“However, if we don't secure a new trading relationship with the EU that is free of tariffs and customs checks, British consumers could face significant increases to their annual car repair bill due to new tariffs and other trade barriers.”

The SMMT's report revealed that a 2.5% to 4.5% World Trade Organisation (WTO) tariff on imported car parts would cost the average car owner an extra £21-a-year for replacement components.

Quotas, subsidies, customs delays and regulatory barriers could add an additional £49, resulting in a £2.14 billion rise in the UK's collective car maintenance bill.

Some 80% of replacement car parts fitted to British cars are imported, with almost three quarters of these coming from EU-based suppliers, the report found.

The report highlighted a growth in the production of automotive parts in the UK but warned that WTO tariffs could cost the domestic industry up to £3 billion in lost revenue.

In 2016 the UK automotive aftermarket sector, which includes parts makers, distributors, retailers and workshops, grew its turnover by 2.4% to £21.6 billion while raising its contribution to the economy by 2.5% to £12.5 billion and creating an additional 1,400 extra jobs.

The total number of jobs supported by the sector now stands at some 347,000 – more than the population of Coventry.

As the number and age of vehicles on UK roads increases, thanks to a strong new car market, ever-improving reliability and more advanced servicing techniques, by 2022, the UK automotive aftermarket is projected to be worth some £28 billion, with an employee base of 400,000.

The SMMT said that the future relationship between the UK and EU automotive sectors would need to address tariff and non-tariff barriers, regulatory and labour issues, all of which will take time to negotiate.

Hawes said: “This report shows just how vital the UK automotive aftermarket is to our economy and society, supporting hundreds of thousands of jobs and keeping vehicles safe – and the country moving.

“Government must now prioritise an interim arrangement that maintains single market and customs union membership until the right trade deal with the EU is implemented.”

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