{"id":1557,"date":"2020-02-20T11:36:34","date_gmt":"2020-02-20T11:36:34","guid":{"rendered":"https:\/\/autoanalysis.co\/?page_id=1557"},"modified":"2020-03-09T15:08:52","modified_gmt":"2020-03-09T15:08:52","slug":"autoanalysis-brexit-impact-assessment-model","status":"publish","type":"page","link":"https:\/\/autoanalysis.co\/?page_id=1557","title":{"rendered":"AutoAnalysis\u2019 Brexit Impact Assessment Model"},"content":{"rendered":"\t\t
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AutoAnalysis\u2019 Brexit Impact Assessment Model<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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What it's going to cost...<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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AutoAnalysis has developed a model to calculate the impact of tariffs on UK vehicle manufacturing if the UK switches to trading on WTO terms when its departure from the EU is complete.\u00a0 We have modelled the tariff impact for each vehicle manufacturer in the UK.\u00a0 <\/span><\/span><\/p>

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The model was first described on just-auto.com<\/a> <\/span><\/span>\u00a0and later at greater length in chapter 3 of the book Keeping the Wheels on Road<\/a>.<\/i><\/span><\/span><\/span><\/p>

The model works as follows, taking a hypothetical UK-made vehicle:<\/span><\/p>

\u00b7\u00a0\u00a0<\/span><\/span><\/span>Annual production: 200,000, with 150,000 exported to the EU<\/i><\/span><\/p>

\u00b7\u00a0 \u00a0\u00a0<\/span><\/span><\/span>Finished vehicle landed cost in the EU: \u00a321,000<\/i><\/span><\/p>

\u00b7\u00a0 \u00a0\u00a0<\/span><\/span>External bill of materials: \u00a39,000 of which EU sourcing is 50% at tier 1s; UK content is 40% at tier 1 level, but 30% of this is actually sourced from the EU<\/i><\/span><\/p>

\u00b7\u00a0 \u00a0 \u00a0<\/span><\/span>Average import components tariff: 3.5%<\/i><\/span><\/p>

\u00b7\u00a0 \u00a0 \u00a0<\/span><\/span>EU finished vehicle tariff: 10%<\/i><\/span><\/p>

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Taking these base parameters, tariffs would add just over \u00a339m to the vehicle\u2019s bill of materials, but generate a far higher number, \u00a3315m, in EU tariffs on finished vehicles.

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Applying this model to actual production volumes and known costs produces a total tariff bill for UK car and engine producers of over \u00a33bn per year.\u00a0 Some of this can be mitigated through various processing reliefs, although complying with tax authorities\u2019 regulations here is not simple.<\/span><\/p>

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In addition to tariffs, the industry would face non-tariff barriers (NTBs) covering costs of regulatory compliance, customs processing, delays at the border, the need for additional stocks to cover supply chain disruption and increased working capital requirements to cover additional stocks, funding tariff payments and changes to the VAT regime.\u00a0 Evidence from other industries suggests that NTBs can amount to between half and one and a half times the cost of tariffs.<\/span><\/p>

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Please contact us for further details:<\/b>\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\n\t\t\t\t\t<\/i><\/div>\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

AutoAnalysis\u2019 Brexit Impact Assessment Model What it’s going to cost… AutoAnalysis has developed a model to calculate the impact of tariffs on UK vehicle manufacturing if the UK switches to trading on WTO terms when its departure from the EU is complete.\u00a0 We have modelled the tariff impact for each vehicle manufacturer in the UK.\u00a0 The model was first described on just-auto.com \u00a0and later at greater length in chapter 3 of the book Keeping the … <\/p>\n

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