A majority of fleet operators think that their costs will increase as a result of leaving the EU, a poll by Fleet News suggests.
With 60% of respondents agreeing that Brexit will hurt their fleet budgets, the results are contrasted with earlier polls conducted on the website.
In a March 2016 poll, 61% predicted that Brexit would have no negative effect in this area. Before the referendum, poll results suggested that 51.6% of fleet operators backed leaving the EU, compared to 42.8% hoping for a ‘remain’ vote.
The Society of Motor Manufacturers and Traders (SMMT) has expressed concerns about the lack of clarity over the UK’s future trade with the EU.
Without clear guidance, fleet decision-makers are unable to prepare for the impact of tariffs on goods crossing EU borders, for instance. Additionally, fears are growing around the potential consequences of the UK enacting Brexit without securing a good deal in negotiations.
New tariffs could dramatically affect the commercial viability of UK car plant operations by increasing the manufacturing cost of new vehicles, raising the prices of importing them into the UK, as well as making them more expensive for foreign buyers.
In the event of a ‘no deal’, World Trade Organisation (WTO) rules would specify tariffs on vehicle components being imported into the UK, pushing up service, maintenance and repair (SMR) costs as result.
Paul Hollick, chairman of the ICFM, echoed these concerns, indicating that higher costs through tariffs could cause delays in new vehicle and spare parts deliveries as border customs adjust to new realities.
Chairman of the Vehicle Remarketing Association (VRA), Glenn Sturley, also warned about the difficulty of business planning in the context of Brexit uncertainty.
“The issue is that there remains such a wide range of potential scenarios – from a cliff edge departure from the EU through to abandoning Brexit altogether – and the outcome may not be known until the last minute,” said Sturley.
“As the year progresses and we get closer to the deadline for leaving the EU, this uncertainty is likely to become more acute and the resulting impact on the overall economy is more difficult to predict. It is not difficult to foresee situations where the economic effects are quite severe and sudden, especially if they are accompanied by political instability.”
Both the BVRLA and the AFCO, notable organisations representing the fleet sector, were reluctant to speculate on beneficial actions for fleets to take with Brexit negotiations still underway.
Geoffrey Bray, Chairman of the Fleet Industry Advisory Group (FIAG), sought reasons for positivity. He pointed to potential opportunities arising from a new trading regime, as well as the possibility of a long-term transitionary period between the EU and UK which could maintain current trading standards.
“It is a challenging and changing world and Brexit will have an impact,” Bray said. “But it will also present major opportunities. Businesses must be nimble and alert – and that includes within the fleet arena – and move forward as opportunities occur.
“March 29, 2019, is when the UK is scheduled to withdraw from the European Union. That date is a long way off and the reality is that Brexit negotiations are likely to be protracted and could continue much longer than the Government’s two-year forecast in terms of having new trade agreements in place.
“Therefore, fleets must continue to operate against a background of what is known and manage assets effectively and efficiently. That means continuing to evolve because standing still while awaiting Brexit’s outcome, which will take many months and even years, simply means costs will escalate.”