Prices could soar if tariffs are imposed

CAR prices could soar and production levels plummet if tariffs are imposed in the absence of a post-Brexit trade deal with the EU, MPs have been told.

Delays at ports could cost the motor industry £50,000 a minute, the Commons Business Committee heard.

Lloyd Mulkerrins, of the Society of Motor Manufacturers and Traders, warned that UK production could fall to 800,000 units a year if tariffs were imposed, meaning prices would rise.

In recent years the UK has been producing between 1.3 million and 1.6 million vehicles a year, Mr Mulkerrins said. He added: “I mentioned production volumes petering out to maybe 800,000 next year, and indeed they go even lower over the next consecutive years to potentially 600,000 units produced here as well, now it would cost the industry almost £50 billion between the UK and the EU over the lifetime of this parliament in a no-deal scenario.

“We would see costs go up for UK-produced vehicles sold into the EU – roughly £3,000 on a car, £2,000 on a van.

“And, indeed, on import we would see consumer prices go up for those who want to buy cars here of roughly £1,800 for a car or van as well.”

Asked how much vehicle sales to the EU would drop with the introduction of tariffs in a no-deal scenario, Mr Mulkerrins said: “We have had some independent forecasters look at this and we would be in the ball park of sub-one million UK-produced vehicles if there were tariffs applied on the bilateral exchange of goods between the UK and the EU as well.”