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SMMT GREAT BRITAIN

Britain in Brexit car market ‘calm before the storm’

SMMT GREAT BRITAINThe effects of Brexit on Britain’s automotive sector will not be felt until the winter – but it is “difficult to foresee” a situation where both new and used car sales won’t start to drop.

Vehicle data provider Glass’s warns we’re currently in a calm period following the decision to leave the European Union. It will take six months for the full effects to filter through, particularly as the Brexit vote has come in the summer when trade activity is slow.

“The decision to leave has been taken but we have yet to see many material changes,” says Glass’s director of valuations Rupert Pontin.

But the storm is coming, he warns. First, fuel prices are likely to rise due to the fall in the value of the pound. The handover to Britain’s new Prime Minister – now confirmed to be Theresa May – could also trigger a further period of instability; May’s views on when Britain will enact Article 50 to ‘Brexit’ within two years will be important here. 

“Hopefully, from there, we will soon start to see a picture emerging of the timetable for the next few years, which will at least allow dealers and manufacturers to plan more accurately. One of the issues at the moment is the sheer number of unknowns.”

Winter storm

It’s when economic indicators arrive later in the year that Glass’s expects larger scale issues to emerge.

“The next set of indicators is likely to be seen in areas such as retail and the housing market if consumer confidence continues to fall and lenders become more risk averse, making borrowing more expensive.” It’s almost impossible to predict how these factors will impact the car market, says Pontin.

“However, it is difficult to foresee a situation in which the decision to Brexit does not have a negative effect on both new and used car sales in the short-medium term even if, as leave campaigners promised, it turns out to be good for the economy in the longer term.”

The automotive industry should brace itself for the possible storm ahead…

SMMT GREAT BRITAIN

Britain in Brexit car market 'calm before the storm'

SMMT GREAT BRITAINThe effects of Brexit on Britain’s automotive sector will not be felt until the winter – but it is “difficult to foresee” a situation where both new and used car sales won’t start to drop.

Vehicle data provider Glass’s warns we’re currently in a calm period following the decision to leave the European Union. It will take six months for the full effects to filter through, particularly as the Brexit vote has come in the summer when trade activity is slow.

“The decision to leave has been taken but we have yet to see many material changes,” says Glass’s director of valuations Rupert Pontin.

But the storm is coming, he warns. First, fuel prices are likely to rise due to the fall in the value of the pound. The handover to Britain’s new Prime Minister – now confirmed to be Theresa May – could also trigger a further period of instability; May’s views on when Britain will enact Article 50 to ‘Brexit’ within two years will be important here. 

“Hopefully, from there, we will soon start to see a picture emerging of the timetable for the next few years, which will at least allow dealers and manufacturers to plan more accurately. One of the issues at the moment is the sheer number of unknowns.”

Winter storm

It’s when economic indicators arrive later in the year that Glass’s expects larger scale issues to emerge.

“The next set of indicators is likely to be seen in areas such as retail and the housing market if consumer confidence continues to fall and lenders become more risk averse, making borrowing more expensive.” It’s almost impossible to predict how these factors will impact the car market, says Pontin.

“However, it is difficult to foresee a situation in which the decision to Brexit does not have a negative effect on both new and used car sales in the short-medium term even if, as leave campaigners promised, it turns out to be good for the economy in the longer term.”

The automotive industry should brace itself for the possible storm ahead…

Diesel

‘Grow up’ before demonising diesel says Glass’s

DieselGovernment officials are being urged to avoid knee-jerk policies that penalise diesel cars before looking at the facts – because they may turn out to be counterproductive.

Trade title Glass’s says such policies may already be impacting on sales of new diesel cars which risk hitting both current and predicted residual values.

Rupert Pontin, head of valuations at the title, urged officials to be cautious because, although reports do ‘point the finger’ at diesel, “they are reporting an historic picture.

“The latest diesel emissions standards are very stringent and newer vehicles are unlikely to have the same kind of impact on the air that we breathe.

“We need a grown-up debate that recognises the subtleties of the situation.”

Hybrid hubris?

Increasing numbers of car buyers are switching to hybrid or plug-in electric cars instead of diesel because, said Pontin, of a “general assumption that… a hybrid is always cleaner than a diesel.

“But the picture is not always that straightforward and we are potentially engineering a move away from diesel without looking at all of the facts.”

Diesel, he said, could still be the best choice, given “their low CO2 emissions, strong fuel economy and overall performance”.

The call from Glass’s comes as some councils introduce blanket anti-diesel legislation and central government looks at imposing low emissions zones that could also target a reduction in the use of diesel.

AA: ‘don’t jump on the bandwagon’

This Wednesday’s Summer Budget 2015 could see emissions-related changes to vehicle taxation, but AA president Edmond King has urged the Chancellor to avoid these.

He instead suggests “not jumping on the local tax bandwagon which exploits the demonising of diesel… but offering fiscal encouragement for converting the main urban emissions polluters to hybrid or electric alternatives.”

Measures include electric bus, taxi and delivery van conversions.

“The AA is concerned that urban emissions scare-mongering will be used as an excuse for raising fuel and car ownership tax.

“Rather than an even greater burden of tax, the AA calls on the Chancellor to be more innovative and use more of the existing tax haul to influence motoring behaviour.”

Tune in to Motoring Research for all the news and live reaction to the 2015 Budget this Wednesday from midday

More on Motoring Research:

Diesel

'Grow up' before demonising diesel says Glass's

DieselGovernment officials are being urged to avoid knee-jerk policies that penalise diesel cars before looking at the facts – because they may turn out to be counterproductive.

Trade title Glass’s says such policies may already be impacting on sales of new diesel cars which risk hitting both current and predicted residual values.

Rupert Pontin, head of valuations at the title, urged officials to be cautious because, although reports do ‘point the finger’ at diesel, “they are reporting an historic picture.

“The latest diesel emissions standards are very stringent and newer vehicles are unlikely to have the same kind of impact on the air that we breathe.

“We need a grown-up debate that recognises the subtleties of the situation.”

Hybrid hubris?

Increasing numbers of car buyers are switching to hybrid or plug-in electric cars instead of diesel because, said Pontin, of a “general assumption that… a hybrid is always cleaner than a diesel.

“But the picture is not always that straightforward and we are potentially engineering a move away from diesel without looking at all of the facts.”

Diesel, he said, could still be the best choice, given “their low CO2 emissions, strong fuel economy and overall performance”.

The call from Glass’s comes as some councils introduce blanket anti-diesel legislation and central government looks at imposing low emissions zones that could also target a reduction in the use of diesel.

AA: ‘don’t jump on the bandwagon’

This Wednesday’s Summer Budget 2015 could see emissions-related changes to vehicle taxation, but AA president Edmond King has urged the Chancellor to avoid these.

He instead suggests “not jumping on the local tax bandwagon which exploits the demonising of diesel… but offering fiscal encouragement for converting the main urban emissions polluters to hybrid or electric alternatives.”

Measures include electric bus, taxi and delivery van conversions.

“The AA is concerned that urban emissions scare-mongering will be used as an excuse for raising fuel and car ownership tax.

“Rather than an even greater burden of tax, the AA calls on the Chancellor to be more innovative and use more of the existing tax haul to influence motoring behaviour.”

Tune in to Motoring Research for all the news and live reaction to the 2015 Budget this Wednesday from midday

More on Motoring Research:

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