Investigation
With Britain’s EU exit imminent, we look at whether the cost of motorcycles and motorcycling is going to go up…
What Brexit means for us
THERE MIGHT HAVE been plenty of other things to think about in 2020 but the year has also been the transition period for leaving the European Union — and from midnight on December 31, our ties with the EU are severed. With all eyes on the Coronavirus pandemic, the subject of Brexit has slipped from the front pages and from many people’s minds, but with or without a trade deal, it’s here. So what’s changing and what do you need to know about it?
Are bikes going to get more expensive?
At the time of writing, negotiations with the EU remain in deadlock and experts are putting increasing odds on a no-deal outcome. But regardless of the deal, Brexit could bring a new layer of complexity to importing bikes from Europe, with inevitable additional costs that may be passed on to consumers.
If we end up having no trade deal, there will be consequences: with ‘no-deal’ there will be new tariffs imposed on goods imported from Europe, which could mean higher prices. On motorcycles, that tariff means an extra 8% on bikes up to 250cc and 6% on everything bigger than that. These are the same duties that are already applied to non-eu bikes, though, so they’re already a reality for a vast number of models sold in this country. Even many European-brand bikes — Ducatis and Triumphs, for example — are made in noneu countries, so are already subject to import tariffs.
Japanese-made bikes have been subject to the same rates, although the recent Eu-japan trade deal sees them being reduced to zero in several steps over the coming years. The UK’S new trade agreement with Japan mirrors the Eu-japan deal, although the tariff reductions may end up lagging one year behind those in the EU.
MCIA Chief Executive Tony Campbell said: “The advice that we’re giving is that nodeal is going to be the likely outcome, although there’s a little bit more optimism now that something might be done. The biggest challenge is going to be around implementation and if there is a deal, are the protocols in place to accommodate whatever the deal looks like.”
The EU currently imposes an additional 25% tariff on American bikes as part of a complex trade tussle sparked by competition between Boeing and Airbus. Despite leaving the EU, the UK will retain this arrangement, so hopes of cut-price Us-made bikes seem to have been dashed at the moment.
Regardless of taxes and tariffs there are going to be additional layers of red tape for bikes being imported from the EU. Any resulting costs will inevitably trickle down to consumers eventually. Campbell added: “Where the customer might lose out, is if we end up having to pay tariffs on goods that are coming in from the EU.”
The biggest impact on cost may be currency fluctuations rather than import tariffs or customs rules though. If the Pound’s value falls as result of a badly-handled Brexit, then everything we import — including bikes — will become more expensive.
‘The biggest challenge will be implementation’ TONY CAMPBELL, MCIA
What about parts, clothing and accessories?
While tariffs on bikes and components coming in from Europe will be imposed if there’s no deal in place, tariffs for many non-eu motorcycle parts and accessories will actually be reduced after January 1 as part of plans to reduce or eliminate small tariffs. For instance, tyres will face 4% duty instead of 4.5%, while most parts and accessories will have their duties cut from 3.7% to 2%. Some, including chains and lights, will drop from 2.7% to
0% next year.
Are petrol prices likely to be affected?
Petrol tariffs (set at 0%) won’t change when we leave the EU, regardless of whether there’s a deal in place or not. However, other aspects of Brexit — like any potential drop in the value of the Pound — could affect them. At the moment though, it’s likely that internal UK pressures are going to be a bigger issue for fuel prices than Brexit next year. Chancellor Rishi Sunak was expected to hike fuel tax at the autumn budget, cancelled in September, so a rise is likely at the next budget.