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UK car industry warns next PM no-deal Brexit is not an option

UK car industry warns next PM no-deal Brexit is not an option

Britain’s car industry has warned the next prime minister against a “seismic” no-deal Brexit in October, which it said could add billions of pounds in tariffs and cause border disruption, crippling the sector.

Boris Johnson, the frontrunner to succeed Theresa May, and his leadership rival Jeremy Hunt, have said they are prepared to take Britain out of the EU without a deal on October 31.

Both have said, however, that this is not their preferred option.

Industry body the Society of Motor Manufacturers and Traders (SMMT) warned about the scale of disruption a disorderly exit would cause.

“Leaving the EU without a deal would trigger the most seismic shift in trading conditions ever experienced by automotive, with billions of pounds of tariffs threatening to impact consumer choice and affordability,” it said.

The UK automotive industry fears that a disorderly exit from the EU, its biggest export market, could see the imposition of tariffs of up to 10% on finished models and border delays which could snarl up ports and motorways, ruining just-in-time production.

A hard Brexit border could cost £50,000 a minute in border delays, the SMMT said.

“The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, ‘no deal’ is not an option – we don’t have the luxury of time,” SMMT chief executive Mike Hawes told a conference.

The UK car sector, rebuilt by foreign manufacturers since the 1980s, had been a runaway success story in recent years.

But since 2017 sales, investment and production have all slumped, blamed on a collapse in demand for diesel vehicles and Brexit uncertainty.

Brexiteers have long argued that the EU’s biggest economy Germany, which exports hundreds of thousands of cars to Britain ever year, would do its utmost to protect that trade.

The British car sector has faced a series of setbacks this year including around 4,500 job cuts at Jaguar Land Rover (JLR) and plant closure announcements from Honda and Ford.

Several investment decisions are also due, including whether JLR will build electric cars in its home market and whether Peugeot will keep its Vauxhall car plant open.

“If the right choices are made, a bright future is possible,” said Hawes. “However, “no deal” remains the clear and present danger,” he added.

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New car sales slow again in May – CSO

New car sales slow again in May – CSO

The number of new private cars licensed for the first time fell again in May as imports continued to rise, new figures from the Central Statistics Office show.

A total of 9,126 new private cars were licensed in May, down 2.5% from the 9,362 registered the same time last year.

Meanwhile, the number of used, or imported, cars licensed increased by 2.7% in May to 9,062 as a weaker sterling continues to make it more attractive to buy and import vehicles from the UK.

The CSO also said there was a 1% decrease in the number of new goods vehicles licensed in May, bringing the total to 2,514.

In the first five months of 2019, a total of 73,781 new private cars were licensed, down 7% compared with the same period last year.

And the number of used private cars licensed increased by 3.5% compared with the same time in 2018.

Figures last month from the CSO had shown that new car sales rose by 19.4% in April compared to the same time last year, with the increase mainly due to the timing of Easter.

Today’s CSO figures also show that Volkswagen was the most popular make of new private car licensed in May. It was followed by Toyota, Renault, Opel and Ford.

The CSO said that together these five makes represent 45% of all new private cars licensed in May.

The CSO also noted that in the first five months of this year, 47.5% of all new private cars licensed were diesel, compared with 55.5% the same time last year.

When it comes to buying cars, licensing and registration are different processes. A vehicle is licensed when a valid motor tax disc is issued for the first time whereas registration occurs when a vehicle gets its licence plate (registration number) for the first time.

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