Boris Johnson says there is a "strong possibility" the UK will fail to strike a post-Brexit trade deal with the EU. Speaking for the first time since a crunch meeting in Brussels, the PM said "now is the time" for firms and people to prepare for a no deal outcome. Talks continue between the two sides but Mr Johnson said they were "not yet there at all" in securing a deal.
Time is running out to reach an agreement before the UK stops following EU trade rules on 31 December. Weeks of intensive talks between officials have failed to overcome obstacles in key areas, including competition rules and fishing rights. Mr Johnson met European Commission President Ursula von der Leyen on Wednesday, but the pair failed to make a breakthrough.
Mr Johnson pledged British negotiators, who earlier resumed talks with their EU counterparts in Brussels, would "go the extra mile" to reach a deal. But he said the EU wanted to keep the UK "locked" into its legal system, or face punishments such as taxes on imports, which had "made things much more difficult". The PM added that the EU's proposals would mean, despite leaving the bloc earlier this year, the UK would be forced to remain a "twin" of the 27-country organisation. "At the moment, I have to tell you in all candour, the treaty is not there yet and that was the strong view of our cabinet," he said.
Northern Ireland could be faced with a potential online tax as customs administration charges may be applied to parcels arriving from Britain after Brexit, according to the Consumer Council. The organisation, which promotes and safeguards the interests of consumers and businesses, is concerned that people here could face new difficulties when shopping for goods online from January 1.
Customer administration charges could be applied to parcels coming from Britain, which will likely lead to higher costs, delays and reduced choice for online shoppers. The second-hand car market could also be in for a shock due to changes after January 1.
Chief executive of the National Franchised Dealers Association (NFDA) Sue Robinson said second-hand vehicle prices here are at risk of increasing by a fifth due to the unannounced VAT arrangements. She said at present car buyers only pay VAT on the margin between the purchase and sale price of a vehicle.
But the NFDA estimates that 10%-20% of cars imported from Britain after January 1 will attract a 20% VAT charge on the whole vehicle. "After interventions in Parliament from MPs from several parties in Northern Ireland, Government ministers have acknowledged that there is a problem, but they have not yet resolved it with their EU counterparts," she said. "It is alarming that, with less than a month to go until the end of the transition period, consumers in Northern Ireland are still facing this price hike."
New and used light commercial vehicle (LCV) sales have proved to be more than resilient to the current COVID-19 coronavirus crisis – they are thriving because of it. While the Society of Motor Manufacturers and Traders (SMMT) reported 8.8% growth in LCV sales during a November which saw ‘Lockdown 2’ in England result in a 27.4% decline in new car registrations, remarketing businesses have also seen demand soar for used vans.
National Franchised Dealers Association (NFDA) chief executive, Sue Robinson, acknowledged that vans sold to fleets are usually delivered to customers – leaving them unaffected by November’s showroom closures – but also noted that the sector is being driven by a delivery trend triggered by COVID-19. “As door-to-door online deliveries continue to support van registrations, it is positive to see the sustained growth in the light commercial market in recent months, which is partly offsetting the impact that the pandemic had on the sector earlier in the year,” she said.
Marshall Motor Holdings has upgraded its profit forecast for 2020 after it “significantly outperformed” the UK car retail market in October and November. The top AM100 2020 car retail group PLC has said that it is now anticipating an underlying profit before tax for the year ending December 31, 2020, of "not less than" £19m.
In a statement issued via the London Stock Exchange this morning (December 9), the group said that recent performance in aftersales and the sale of new and used vehicles via ‘click and collect’ during COVID-19 ‘Lockdown 2’ in England meant that it was able to upgrade the predicted result from the £15m stated back in October.
Noting the uncertainties that still lie ahead, the group said: “There continues to remain significant social and economic uncertainties as a result of both COVID-19 and the potential impact of the UK's departure from the European Union on 31 December 2020.
“Whilst the board is pleased with the group’s response to the significant challenges presented by COVID-19 in 2020, demonstrating the strength and resilience of the group’s business, it has also benefited from a number of well-documented sector tailwinds in 2020 and therefore remains cautious over the trading environment for 2021.”
Marshall said that it had benefited from “previously reported sector tailwinds” during October, with new retail unit sales up on a like-for-like basis and significantly outperforming the UK registration figures reported by the Society of Motor Manufacturers and Traders (SMMT).
Vertu Motors today hailed a strong recovery from the Covid-19 pandemic and signalled its confidence with an £18 million takeover of a clutch of lossmaking Inchcape BMW and Mini showrooms. The deal gives Vertu BMW and Mini dealerships for the first time and the buyer pledged to turn them around in three years.
Unusually, it is being funded through a £13 million mortgage from BMW’s financial services arm secured against the value of the properties. Vertu is buying 12 outlets in York, Sunderland, Teesside, Durham and Malton, adding to the group’s 146 locations.
It is buying them from Inchcape’s Cooper Group division. Vertu, which trades under the Vertu, Bristol Street Motors, Farnell and Macklin Motors brands, has hired a new management team with BMW and Mini experience to revamp the business. The new sites will trade under the Vertu brand.
"The clock is ticking. From the first of January 2021 businesses that deal with Europe will have to follow new rules on exports, imports, tariffs, data & hiring." So begins the government advert intended to prepare businesses for Brexit. The problem, as far as many businesses are concerned, is that they can't be ready until the government is. With negotiations ongoing and just 23 days to go, there is still no sign of that.
Business does at least know it doesn't want a no-deal Brexit, an outcome that would replace 40 years of genuinely free trade with barriers and ill-will. Tariffs imposed by the EU would raise the price of UK exports, while those levied on imports by the UK would raise prices for British consumers. Add disruption and border delays and GDP will fall by a forecast 2%, on top of the 11% COVID contraction of the last nine months.
But if no-deal is averted, it's hard to draw a conclusion about what lies ahead. Amid the brinkmanship on both sides of the Channel lies a sea of uncertainty for business. In every sphere, from farming to pharmaceuticals, vital details of the future trading, regulatory and taxation implications of a deal are unclear.
Boris Johnson is today being warned by motor industry bosses that the sector is unlikely to be ready for the fast-tracked transition to electric vehicles from 2030. Following the Prime Minister's decision last month to accelerate the ban on sale of new petrol and diesel cars by a decade, the Institute of the Motor Industry (IMI) says there simply won't be enough trained mechanics available to work on a growing volume of electric vehicles on our roads. In an open letter penned on Monday, Professor Jim Saker and Steve Nash - respective president and ceo of the IMI - said that just one in twenty technicians working in garages and dealerships are certified to safely maintain and service battery-powered cars.
Honda’s factory in Swindon will not restart production until Monday at the earliest after the Japanese carmaker was forced to shut it down because of significant delays at UK ports. Disruption at the UK’s largest container port, Felixstowe, has spread to other ports, causing holdups to critical goods entering the country.
Global shipping industry prices have risen dramatically in recent weeks because of disruption caused by the coronavirus pandemic, while there is also a shortage of containers at Chinese ports. Carmakers such as Honda are particularly vulnerable to the disruption because of their “just-in-time” supply chains, which minimise costs by bringing parts to factories only when required.
The Swindon plant, which produces the Civic car, shut down on Monday night because of delays in receiving spare parts from east Asia. Honda is now considering flying in parts, as Bentley and Jaguar Land Rover have both previously weighed up. A spokesman said: “Honda UK has confirmed to employees that production will not run on Thursday 10 or Friday 11 December due to transport-related parts delays. The situation is currently being monitored with a view to restart production on Monday 14 December.”
Jaguar Land Rover has shut down production at its Castle Bromwich factory until Christmas because “an issue related to Covid” has prevented the delivery of key materials, in another sign of the strains facing the UK automotive industry. Production of JLR’s XE and XF cars stopped earlier this week and will not restart for two weeks, in another blow to the UK’s largest carmaker as it struggles with the coronavirus pandemic and Brexit preparations.
The cause was a “supplier issue related to Covid”, a spokeswoman said. JLR declined to identify the supplier in question or which materials were in short supply. Workers at the factory are still producing the Jaguar F-Type. The spokeswoman insisted the shortage was not caused by the congestion at England’s ports, which forced the Japanese carmaker Honda to stop production this week. Honda’s shutdown will continue until Monday at least.