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The Chancellor’s summer economic plan introduced a range of measures to help the UK economy recover from the impact of the coronavirus.

The plan, revealed to the House of Commons yesterday (Wednesday, July 8), to protect jobs, help younger workers and encourage spending with measures such as a temporary VAT cut, from 20% to 5%, for the hospitality sector and a restaurant voucher scheme.

However, help for the fleet industry and wider automotive sector, including a potential scrappage scheme, was not forthcoming.

Paul Hollick, chairman of fleet representative body the Association of Fleet Professionals (AFP), said: “The Chancellor’s announcement was all about carefully targeted help for various sectors that are felt to be among the most vulnerable and it is disappointing that none of this support has found its way into areas that are likely to benefit fleets.

“This especially applies to low-carbon transport initiatives but there could also have potentially been aid for dealers, manufacturers and even fleet service support companies, all of which are facing specific problems.

“Given the fast-moving economic and infection situation, we don’t think this is the last time we’ll see him making announcements of this type over the next few months and we remain hopeful that we will be included in future programmes, an argument we’ll be making as an organisation.”

The automotive sector had been hoping for a scrappage scheme, offering money off a new car purchase.

Mike Hawes, chief executive at the Society of Motor Manufacturers and Traders (SMMT), welcomed the Chancellor’s plans to safeguard jobs and encourage consumer spending in some parts of the economy.

However, he said: “It’s bitterly disappointing the Chancellor has stopped short of supporting the restart of one of the UK’s most important employers and a driver of growth.

“The automotive sector has been particularly hard hit, with thousands of job losses already announced and many more at risk.

“Of Europe’s five biggest economies, Britain now stands alone in failing to provide any dedicated support for its automotive industry, a situation that will only deter future investment.

“We urgently need government to expand its strategy and introduce sector-specific measures for UK auto to support cash flow such as business rate holidays, tax cuts, and policies that provide broader support for consumer confidence and boost the big ticket spending that drives manufacturing. Until critical industries such as automotive recover, the UK economic recovery will be stuck in low gear.”

The Chancellor instead offered a ‘job retention bonus’ to encourage firms to retain furloughed staff. The one-off £1,000 payment will be made to employers for every furloughed employee retained to the end of January 2021.

It applies to workers earning over £520 per month, with the cost estimated at up to £9.4 billion.

There is a six-month VAT cut for restaurants, hotels and attractions, from 20% to 5% from July 15 to January 12, 2021.

Food and non-alcoholic drinks in restaurants, pubs and cafes, as well as hot takeaway food will be covered. Accommodation in hotels and B&Bs and admission to attractions such as theme parks and cinemas also affected

The threshold for stamp duty on residential property in England and Northern Ireland will also rise from £125,000 to £500,000. It applies from July 8 until March 31, 2021.

Energy efficiency grants for homes have also been introduced.

In addition, a ‘Eat Out to Help Out’ scheme offers 50% discount for every diner, up to £10 a head, from Monday to Wednesday throughout August.

Support for young workers is to be delivered through the ‘Kickstart scheme’ – a £2bn fund to pay for six-month work placements for 16 to 24-year-olds on universal credit – and grants for training young people.

In terms of infrastructure, more is expected in the Budget, while the Prime Minister, Boris Johnson, has earmarked £100 million for 29 road projects.

Nick Molho, executive director of the Aldersgate Group, said: “Beyond the need to commit public investment to support shovel ready projects and early stage innovation trials, it is critical that the Government puts forward a comprehensive policy plan in the autumn to drive private sector investment towards the low carbon and environmentally resilient infrastructure needed to put the UK on track for its net zero and nature restoration targets.

“Clear policy commitments in areas such as energy efficiency, clean transport and industrial decarbonisation will be vital if the private sector is to do a lot of the heavy lifting to build a competitive, jobs rich, low carbon economy.” By Graham Hill thanks to Fleet News

Used car values for both petrol and diesel stayed strong in August, but used electric vehicles (EVs) and some hybrids continue to struggle, says Cap HPI.

For the third month in a row, values for EVs have reduced, it reports, with feedback from the market suggesting that EVs continue to look expensive compared to their internal combustion engine equivalents.

For the volume models, price pressure continues to be around the three-year-old EVs, which are coming back into the market, says Cap HPI.

Derren Martin, head of valuations UK at Cap HPI, explained: “2017 saw an increase of around 40% in EV new car registrations over the previous year, so it is no surprise that as more vehicles come back into the used market, values will be exposed to supply and demand dynamics.

“Some examples of models that have dropped in value at that age are the BMW i3, Kia Soul and Nissan Leaf.”

Some hybrids that have moved down in value at the three-year point are the Toyota Auris, Toyota Prius, Lexus LS and Mercedes-Benz S-Class. Some of this is due to a reduction in activity in the private hire industry, where demand for these vehicles has historically been strong.

Overall, pricing experts at Cap HPI say that the used car market remains strong in August, with values up by a minimal 0.2% at the three-year point, which equates to around £30 on average.

So far this year, there has only been one month where values dropped and that was during the run-up to lockdown in March.

On average, used car values when calculating the same models at the same age and mileage point as a year ago, are some 7% higher than they were in August 2019.

Martin said: “The used car retail market has remained robust throughout August, making it the third consecutive month since car showrooms reopened with remarkably strong consumer demand.#

“Looking at the retail advertised data received by Cap HPI, it is clear that across all mainstream sectors, prices have edged up slightly on average. This is unsurprising since trade prices have increased overall and consumer demand is so strong.

“If ever there was a time to increase asking prices and maintain margins, the last three months has been it. These small average increases have not adversely affected days-to-sell.”

Martin says that consumer demand is still being driven by people wanting to avoid public transport, buyers downgrading and savers looking to upgrade.

The SUV sector saw smaller models increase in price, while larger ones were under more pressure due to significant availability, meaning prices dropped slightly.

The trend was most acute at younger ages, and at six-months-old, larger SUVs have fallen by around £225 on average, whereas smaller examples have increased by around £150.

The Citroen C4 Cactus, Dacia Duster and Renault Captur have increased in value the most of these smaller models. There is generally a very different customer for these two sizes of SUV.

Martin concluded: “Since the unexpected upturn in June, particularly at older ages, Live values during July and August have stayed very stable, as we predicted.

“September will result in more part-exchanges and fleet returns hitting the market, as new car buyers opt for the 70-plate, but it is unlikely that volumes will be as high as in previous years.”

He continued: “The reduced volumes of cars would typically lead to strong prices. However, with the furlough scheme coming to a close and an economic downturn continuing, consumers are likely to become more prudent.

“The pent-up demand from inactivity during lockdown will come to an end, as will people buying to avoid public transport – that was always likely to be a short-term dynamic. Those upsizing due to grants or savings made during the last few months will also wane.

“In short, predictions are that the next few weeks will remain stable, as there is currently no weakness in the market. However, from the end of September and into October, prices are likely to come under more pressure. What is clear is that viewing valuations in real-time and keeping vigilant will become more important than ever.”  By Graham Hill thanks to Fleet News.

The Government is being warned a ‘no deal’ Brexit could impact vehicle costs and prove fatal to the wider UK automotive sector.

A recent Society of Motor Manufacturers and Traders (SMMT) survey showed one-in-three automotive employees was still on furlough at the end of July, with up to one-in-six jobs at risk.

The impact of the coronavirus crisis is being felt across the sector, but jobs could also be threatened by the prospect of a ‘bare bones’ or no-deal Brexit, says the UK automotive trade body.

If the EU and UK do not agree a deal by the end of the year, the UK will leave the EU’s single market and the customs union without any agreement on future access from January 1, 2021.

The SMMT wants a full, zero-tariff deal in place by the end of the transition period to give businesses on both sides the chance to prepare.

Chief executive Mike Hawes said: “Before Covid-19, we expected to produce 1.3 million vehicles this year; the pandemic means we’re already looking at scarcely 900,000.

“A ‘no deal’ Brexit would wreak further long-term damage on the sector. Tariffs would add cost, custom duties and complexity, which would disrupt supply.”

The SMMT suggests a ‘no deal’ scenario could see UK vehicle volumes falling below 850,000 by 2025 – the lowest level since 1953. This would mean a £40 billion cut in revenues, on top of the £33.5bn cost of Covid-19 production losses over the period for UK automotive.

“The industry cannot withstand the shock of a hard Brexit,” explained Hawes.

“Covid-19 has consumed every inch of capability and capacity. There is not the resource, the time nor the clarity to prepare.”

Almost all countries in the world are part of the World Trade Organisation (WTO) which regulates international trade. Should the UK leave the EU without a deal, its trade with the EU will be governed by WTO rules.

When joining the WTO, each country negotiates the maximum tariffs it can set on various types of goods. The tariff charged by the EU on imported cars is 10%.

Leaving without a deal would mean UK-built cars facing a 10% tariff cost and vice versa, says the SMMT’s annual UK Automotive Trade Report.

Tariffs would result in a price increase of almost £3,000 on the average UK exported car to the EU, a £2,000 price increase on UK vans exported to the EU and a price increase of £1,800 on cars and vans imported from the EU, if fully passed on to UK consumers.

The report adds that additional customs duties, costs and complexity would significantly disrupt sourcing of parts and components from the EU.

Executive director, business transformation at Ford of Britain, Graham Hoare, said the manufacturer had implemented measures to ensure product is available for fleets.

He explained: “We’ve brought a lot of cars into the UK and have maintained that availability. That’s really important so we don’t have disruption to our supply chains as the change happens.”

But he warned: “A Free Trade Agreement is necessary for the viability of our business. If you think about all the other changes we’re embarking upon… another burden just makes the activities we’re performing in the UK a little less viable.”

JUST-IN TIME

Frictionless trade within the EU has been critical for enabling the UK car industry to develop supply chains that cross EU borders several times.

A separate report, produced by The UK in a Changing Europe on Manufacturing and Brexit, highlights how supply chains have to operate with supreme efficiency, and parts have to be delivered ‘just-in-time’ throughout the day.

As an example, 350 trucks arrive from the EU every day at Honda’s plant in Swindon, bringing in about two million parts. Components arrive from five-24 hours after ordering. The plant is scheduled to close a year from now.

Meanwhile, a typical driveline system produced by GKN, the British-based supplier, incorporates specialist forged parts from the UK, Spain, Italy, France and Germany.

These are assembled at GKN Driveline’s factory in Birmingham and supplied to automotive assemblers in the UK and EU.

The components, assembled drivelines and the final assembled car could cross the English Channel several times, says the report.

It is a similar story for BMW, which assembles engines at its Hams Hall engine-assembly plant near Birmingham.

Engine blocks come from France and are processed at the plant. They may go to Germany for further work before being assembled.

The engine may go into a Mini assembled in Oxford or the Netherlands, or into a BMW assembled in Germany.

“The final car could be sold anywhere in Europe or globally,” the report says. “This close integration and the need for minimal trade friction becomes even more important as most UK car producers operate on very low profit margins (around £450 on a £15,000 car).”

BREXIT TALKS

After a meeting between Prime Minister Boris Johnson and the EU Commission president Ursula von der Leyen last month, both agreed new momentum was needed in negotiations.

Official talks resumed at the start of this month, but ended with the EU’s chief negotiator, Michel Barnier, saying that “regardless of the outcome” there would be “inevitable changes” from January 1, 2021. The next round of negotiations began last week, with no apparent progress made.

The commission has also told member states and businesses to revisit plans for a ‘no deal’ Brexit.

In a press briefing, prior to the SMMT’s annual International Automotive Summit, Hawes insisted: “We must secure a comprehensive Free Trade Agreement that maintains tariff- and quota-free trade. With such a deal, a strong recovery is possible.”

The UK in a Changing Europe report says the potential danger is that carmakers may simply decide that production in the UK is no longer profitable and shift their assembly plants to the EU.

Many manufacturers with plants in the UK also have plants in the EU to which they could move production. Moreover, many of these plants have spare capacity.

“Such relocations usually happen when new vehicle models are introduced, and the decisions about sites are normally taken at least two years in advance of planned production starts,” it says.

‘MULTIPLE CHALLENGES’

Key companies in the UK automotive sector, that account for the bulk of UK automotive production – Nissan, Jaguar Land Rover (JLR), and Groupe PSA (Vauxhall’s owner) – have all planned new models in the next couple of years.

“There is a real danger they will decide to produce them in the EU, not the UK,” says the report. “This would have a knock-on effect on other industries in the UK.”

UK steel, for example, despite not being subject to tariffs itself, would suffer because the car industry would contract, reducing demand for steel.

“Manufacturing matters,” said Professor David Bailey, senior fellow of UK in a Changing Europe.

“Much of the sector has already taken a hit through the Covid-19 pandemic and Brexit risks further disruption for manufacturers which they are keen to minimise.

“A no-trade deal is seen as the worst-case scenario for sectors like automotive given the impact of tariffs. But even a minimal Free Trade Agreement could bring disruption for manufacturers, for example via its impact on supply chains and in terms of regulatory divergence. Whatever the form of Brexit at the end of the transition period, manufacturing faces multiple challenges.” By Graham Hill Thanks To Fleet News

We are now into the blackberry season and it would seem that birds love blackberries if my white car is anything to go by! And in these days of water-based car paint, cars are even more vulnerable to this acidic poo than ever before.

At best it makes the car look unsightly at worst, even if you have removed the droppings, the car can remain stained to the point where a lease car could be assessed to be seriously damaged when returned at the end of contract with the leasing company charging for a respray of affected panels. In one case that I reviewed the car needed a complete respray so make sure that you read this advice AND ACT IMMEDIATELY.

Here is the advice from Car Buyer:

We’ve all spent ages cleaning our car to a lovely mirror finish only to have our hard work ruined by the unsightly splatter of bird droppings. As well as being unpleasant and annoying, bird mess can actually damage paintwork, with potential repair bills in the hundreds or even thousands of pounds in the worst cases.

Time is of the essence, because the longer droppings sit on the paintwork, the more chance they have of causing costly problems. But why does bird mess damage paintwork? And what’s the best way to remove it safely?

How can bird droppings damage a car?

When bird droppings are removed from paintwork, they can leave a dull, cloudy mark, and even a visible ripple in the paint’s surface in the worst-case scenario. It’s also possible to make matters worse by scratching the paintwork in the removal process, either by being too aggressive or using the wrong tool.

For many years, the acidity of bird droppings has been blamed for the ‘etching’ effect they can have on paintwork. Recent research carried out by car detailing specialist Autoglym, however, has come up with another reason.

• Carbuyer’s best car cleaning tips and products

In its testing, it was found that as the top layer of paint lacquer warms during the day, it softens and expands, while bird droppings instead dry and become hard. Later on, when the lacquer cools and contracts, it can mould to the texture of the hardened bird mess, leaving a troublesome impression on the surface.

While the effect might be fairly slight, only a small imperfection is needed to create a visible dull patch that stands out against the shiny paint next to it.

How to remove bird mess safely

As we’ve mentioned, speed of removal is the most important factor in preventing damage, and according to Autoglym’s theory, this is especially important on sunny or hot days when the lacquer is at its softest. If you drive your car every day, you’ll have a good chance of spotting any offending droppings quickly and taking swift action.

If you use your car less regularly but it’s still parked outside, it’s worth having a quick look over it on a daily basis. For vehicles left outdoors for longer periods, a car cover is the most sensible and surefire solution. It can also be worth trying to avoid parking under trees, street lights and the eaves of buildings if your car seems to attract bird mess.

The key to easy and safe removal is to use water to ensure the droppings are soft. This is most easily achieved by placing a damp cloth or car cleaning wipe over the offending area and leaving it in place for a few minutes. Once you’ve done this, you should find it comes away from the surface easily.

Always avoid pressing hard, or using a rubbing or scraping motion to dislodge the droppings; if not all of it is removed first time, simply place another damp cloth or cleaning wipe over the spot again and repeat this process until everything has gone.

It’s advisable to wear disposable gloves when tackling this job and, of course, to wash your hands thoroughly afterwards.

What if my car is already damaged?

If the paintwork already has dull spots from bird mess, you can usually deal with them yourself with a little time and attention. More extreme cases may require the help of a car detailing company or paint restoration expert.

If you want to try to correct the paint at home, the first step is to wash the car to ensure it’s clean. Once it’s dry, apply a lightly abrasive car polish to the affected area, following the manufacturer’s instructions. This should gently remove the damaged top layer of paintwork, exposing the fresh paint below for a better finish.

Once it’s polished, ensure you cover the panel with a wax or sealant to protect it from the elements. If the condition of the paint is very poor, an expert will be able to assess the damage and use the correct products along with tools such as orbital polishers to get a satisfactory result.

WD40

I also came across this bit of advice but take care and follow instructions as you don’t want to make matters worse. According to WD-40, its magic-in-a-can spray has 259 automotive uses – and cleaning off dry bird poop from car paint is one of them. To remove bird droppings from your vehicle, spritz a little WD-40 on the area, let it sit for 60 seconds, then rinse or wipe away with a clean, soft cloth.

Final Warning & Advice

You should check your car’s paint warranty and make sure that you don’t do anything that could invalidate the warranty. And if you find that your car is badly damaged and could need a complete respray check to see if you are covered by your insurance especially if you have no claims discount protection. By Graham Hill thanks to Car Buyer

Before providing the latest report I must first warn those who are thinking of joining one of the many class actions against Daimler (Mercedes Benz) over their emissions cheat systems. Read the terms of the class action and make sure that you are not committing to any of the costs should the action fail. I’ll be keeping an eye on things for you as I had 3 Mercedes during the period in question!

Legal claims against Mercedes-Benz for emissions ‘cheating’ in England and Wales have been strengthened following a £1.6 billion settlement in the USA.

London law firm Fox Williams is pursuing claims for Mercedes owners in England and Wales in collaboration with US law firm Hagens Berman, which achieved a payout of more than £560 million for US Mercedes owners.

Mercedes, however, claims the cars sold in America are different to those in the UK.

It is estimated by Fox Williams that up to 1.2 million potential claimants owning (or having owned) impacted vehicles in England and Wales are affected. This includes private owners and businesses, such as fleet operators and hire car companies.

According to Hagens Berman’s investigations, Mercedes used defeat device, similar to the one used by Volkswagen, on its BlueTEC diesel vehicles.

Affected models are alleged to include the A-Class, B-Class, C-Class, Citan, CLA, CLS, E-Class, GL-Class, GLA-Class, GLC-Class, GLE-Class, GLS, M-Class, S-Class, SLK, Sprinter, V-Class, and Vito, built between 2008 and 2018.

Andrew Hill, the Fox Williams partner who is leading the action, said: “Like many members of the general public, I have been shocked at the allegations of deception and fraud made against some of the world’s largest and most prestigious automotive manufacturers, including Mercedes-Benz.  We believe business and private owners in England and Wales will very likely have good claims for the damage caused to them from unwittingly owning or leasing dirty diesels.”

Three other law firms, PGMBM, Leigh Day and Slater and Gordon, are also investigating potential group claims against Mercedes-Benz over emissions.

A spokesperson for Mercedes-Benz Cars UK said: “With regard to the US settlement, the vehicles in question were produced exclusively for the North American market.  The emissions control system of US vehicles differs in comparison to vehicles in Europe both with respect to hardware components and configuration of the control software.  In addition the legal framework and the certification process in the US is different to that in Europe.

“We believe the claims brought forward by the UK law firms are without merit, and will vigorously defend against any group action.”

Daimler AG, the parent company of Mercedes-Benz, was fined more than £700m by German prosecutors in 2019 over the diesel emissions scandal.

It has filed objections against the German Federal Motor Transport Authority’s (KBA) recall orders regarding diesel exhaust emissions and these objection proceedings are ongoing.  By Graham Hill thanks to Fleet News

The average sticker price of a used car grew by 4.6% to £13,888 in July, marking the fourth consecutive month of price growth, according to data from Auto Trader.

The growth is being driven by the strong performance of used internal combustion engine (ICE) vehicles, especially petrol, which last month saw average prices increase 5.6% (£12,604), marking the highest rate of growth since October 2018.

Diesel recorded a similarly strong performance, with average prices increasing 4.1% (£14,705), the highest rate of growth since September 2014.

Prices for used electric vehicles have dropped by 4.3% however, due to increased supply, while alternatively fuelled vehicles (AFV) fared a little better, contracting at a rate of 1.1% (£22,508), marking five months of declining prices.

Richard Walker, Auto Trader’s director of data and insight, said: “Over the last few months, used car prices have benefited from high demand in the market whilst the supply side has emerged more slowly from lockdown.

Even when auctions reopened, the supply of new stock in the market has been slow to return to pre-Covid-19 levels, whilst demand has remained at record levels.

“Looking ahead, at a time of economic uncertainty and with so many variables at play, we will continue to be data driven rather than publish opinion-based statements about the future.

Whilst consumer demand shows no signs of slowing into August, we have seen that supply constraints are working their way through, so we expect the growth rate we’ve seen in recent month to stabilise somewhat, rather than continue to accelerate each month.”

Taking a more granular view of the market, due to growth in demand outstripping supply, price increases were recorded in every price band of used car. Demand for vehicles aged 10-15 years saw a year-on-year growth of 23% in July, while supply fell by -16%.

This resulted in vehicles aged 10-15 years recording the highest price growth among any age group, surging 10.4% (£4,254). In contrast vehicles up to 12 months naturally had the lowest, at 2.6% (£26,500).

In terms of premium and volume brands, both saw demand outstrip supply last month. As a result, both saw an increase in average prices, with premium recording an average growth of 1.8% (£20,779) and volume 9.8% (£9,143).

Sue Robinson, director of the National Franchised Dealers Association, added: “It is encouraging to see sustained growth in used car prices as it demonstrates that, despite the challenging economic circumstances, the public are placing their trust in cars as a means of safe and secure transport. It is interesting to see the greatest increase in value of diesel cars since September 2014.”  By Graham Hill thanks to Fleet News

The Government is being warned a ‘no deal’ Brexit could impact vehicle costs and prove fatal to the wider UK automotive sector.

A recent Society of Motor Manufacturers and Traders (SMMT) survey showed one-in-three automotive employees was still on furlough, with up to one-in-six jobs at risk.

The impact of the coronavirus crisis is being felt across the sector, but jobs could also be threatened by the prospect of a ‘bare bones’ or no-deal Brexit, says the UK automotive trade body.

If the EU and UK do not agree a deal by the end of the year, the UK will leave the EU’s single market and the customs union without any agreement on future access from January 1, 2021.

The SMMT wants a full, zero-tariff deal in place by the end of the transition period to give businesses on both sides the chance to prepare.

Chief executive Mike Hawes said: “Before Covid-19, we expected to produce 1.3 million vehicles this year; the pandemic means we’re already looking at scarcely 900,000.

“A ‘no deal’ Brexit would wreak further long-term damage on the sector. Tariffs would add cost, custom duties and complexity, which would disrupt supply.”

The SMMT suggests a ‘no deal’ scenario could see UK vehicle volumes falling below 850,000 by 2025 – the lowest level since 1953. This would mean a £40 billion cut in revenues, on top of the £33.5bn cost of Covid-19 production losses over the period for UK automotive.

“The industry cannot withstand the shock of a hard Brexit,” explained Hawes.

“Covid-19 has consumed every inch of capability and capacity. There is not the resource, the time nor the clarity to prepare.”

Almost all countries in the world are part of the World Trade Organisation (WTO) which regulates international trade. Should the UK leave the EU without a deal, its trade with the EU will be governed by WTO rules.

When joining the WTO, each country negotiates the maximum tariffs it can set on various types of goods. The tariff charged by the EU on imported cars is 10%.

Leaving without a deal would mean UK-built cars facing a 10% tariff cost and vice versa, says the SMMT’s annual UK Automotive Trade Report.

Tariffs would result in a price increase of almost £3,000 on the average UK exported car to the EU, a £2,000 price increase on UK vans exported to the EU and a price increase of £1,800 on cars and vans imported from the EU, if fully passed on to UK consumers.

The report adds that additional customs duties, costs and complexity would significantly disrupt sourcing of parts and components from the EU.

Executive director, business transformation at Ford of Britain, Graham Hoare, said the manufacturer had implemented measures to ensure product is available for fleets.

He explained: “We’ve brought a lot of cars into the UK and have maintained that availability. That’s really important so we don’t have disruption to our supply chains as the change happens.”

But he warned: “A Free Trade Agreement is necessary for the viability of our business. If you think about all the other changes we’re embarking upon… another burden just makes the activities we’re performing in the UK a little less viable.”

JUST-IN TIME

Frictionless trade within the EU has been critical for enabling the UK car industry to develop supply chains that cross EU borders several times.

A separate report, produced by The UK in a Changing Europe on Manufacturing and Brexit, highlights how supply chains have to operate with supreme efficiency, and parts have to be delivered ‘just-in-time’ throughout the day.

As an example, 350 trucks arrive from the EU every day at Honda’s plant in Swindon, bringing in about two million parts. Components arrive from five-24 hours after ordering. The plant is scheduled to close a year from now.

Meanwhile, a typical driveline system produced by GKN, the British-based supplier, incorporates specialist forged parts from the UK, Spain, Italy, France and Germany.

These are assembled at GKN Driveline’s factory in Birmingham and supplied to automotive assemblers in the UK and EU.

The components, assembled drivelines and the final assembled car could cross the English Channel several times, says the report.

It is a similar story for BMW, which assembles engines at its Hams Hall engine-assembly plant near Birmingham.

Engine blocks come from France and are processed at the plant. They may go to Germany for further work before being assembled.

The engine may go into a Mini assembled in Oxford or the Netherlands, or into a BMW assembled in Germany.

“The final car could be sold anywhere in Europe or globally,” the report says. “This close integration and the need for minimal trade friction becomes even more important as most UK car producers operate on very low profit margins (around £450 on a £15,000 car).”

BREXIT TALKS

After a meeting between Prime Minister Boris Johnson and the EU Commission president Ursula von der Leyen last month, both agreed new momentum was needed in negotiations.

Official talks resumed at the start of this month, but ended with the EU’s chief negotiator, Michel Barnier, saying that “regardless of the outcome” there would be “inevitable changes” from January 1, 2021. The next round of negotiations began last week, with no apparent progress made.

The commission has also told member states and businesses to revisit plans for a ‘no deal’ Brexit.

In a press briefing, prior to the SMMT’s annual International Automotive Summit, Hawes insisted: “We must secure a comprehensive Free Trade Agreement that maintains tariff- and quota-free trade. With such a deal, a strong recovery is possible.”

The UK in a Changing Europe report says the potential danger is that carmakers may simply decide that production in the UK is no longer profitable and shift their assembly plants to the EU.

Many manufacturers with plants in the UK also have plants in the EU to which they could move production. Moreover, many of these plants have spare capacity.

“Such relocations usually happen when new vehicle models are introduced, and the decisions about sites are normally taken at least two years in advance of planned production starts,” it says.

‘MULTIPLE CHALLENGES’

Key companies in the UK automotive sector, that account for the bulk of UK automotive production – Nissan, Jaguar Land Rover (JLR), and Groupe PSA (Vauxhall’s owner) – have all planned new models in the next couple of years.

“There is a real danger they will decide to produce them in the EU, not the UK,” says the report. “This would have a knock-on effect on other industries in the UK.”

UK steel, for example, despite not being subject to tariffs itself, would suffer because the car industry would contract, reducing demand for steel.

“Manufacturing matters,” said Professor David Bailey, senior fellow of UK in a Changing Europe.

“Much of the sector has already taken a hit through the Covid-19 pandemic and Brexit risks further disruption for manufacturers which they are keen to minimise.

“A no-trade deal is seen as the worst-case scenario for sectors like automotive given the impact of tariffs. But even a minimal Free Trade Agreement could bring

disruption for manufacturers, for example via its impact on supply chains and in terms of regulatory divergence. Whatever the form of Brexit at the end of the transition period, manufacturing faces multiple challenges.”  By Graham Hill thanks to Fleet News

Fiat Chrysler Automobiles is being investigated for potential emissions cheating by authorities.

The car maker’s offices, including those of truck maker CNH, in Germany, Switzerland and Italy were raided following claims that some of the company’s engines produced illegal levels of emissions.

Potentially illegal software was allegedly detected in Multijet diesel engines used in Alfa Romeo, Jeep and Fiat cars, plus Iveco and Fiat commercial vehicles.

Prosecuters claim that more than 200,000 vehicles could be affected in Germany alone.

Affected engines include Euro 5 and 6 variants of the 1.3-litre, 1.6-litre and 2.0-litre Multijet diesel engine.

A statement from Eurojust, a European Union agency for criminal cooperation across member states, said: “Defeat devices are illegal according to the European Union regulations in place. Vehicles with defeat devices are not approved for road usage in the EU and consumers with such devices installed in their cars face possible driving bans.”

The probe is said to be looking into a “number of people” who may have been involved in allegedly allowing use of the devices.

An FCA spokesman confirmed that a number of the company’s offices in Europe were visited by investigators in the context of a request for assistance by magistrates in Germany. The spokesman said the business is cooperating fully with authorities.

FCA and CNH Industrial are both controlled by Exor, the holding company of Italy’s Agnelli family.

Renault and Nissan were recently accused of emissions cheating following allegations made against Mercedes-Benz.  By Graham Hill thanks to Fleet News

A loss of confidence in public transport looks set to change how employees will travel to work as the Covid-19 pandemic lockdown eases, new research has found.

A survey by private hire company Addison Lee has found six out of 10 London commuters will change the way they travel when the return to work begins after lockdown.

Meanwhile, recruiter Robert Walters discovered 34% of UK employers surveyed are considering changing working hours to avoid busy commuting periods.

The Addison Lee research of 1,000 commuters across the capital’s 32 boroughs found 55% of commuters plan to change the time of their commute to avoid peak hours, 49% plan to use their own vehicle (up from 23% pre-pandemic), while 28% plan to complete at least part of their journey on foot.

It also found 40% plan to use private hire vehicles as part of their journey.

Liam Griffin, CEO of Addison Lee, said: “Our research shows a clear shift away from commuting on public transport due to safety concerns.”

It reports 69% of respondents say that, even with the introduction of face coverings, taking public transport to and from work makes them feel anxious, while 72% say they will avoid using the tube during their commute unless essential when they return to work.

In response to the research, Addison Lee is asking the London Covid-19 Transition Board to make the safe return to work a priority and actively work with all the capital’s transport providers on a common set of safety standards.

It says this will give commuters confidence to return to work using a variety of means of transport that respect social distancing and the capital’s environmental needs.

The Robert Walters survey found 49%of employers are planning to stagger return to work based on employees’ own health risks related to Covid-19, while 46% will be staggering their return depending on how critical their role is to the business.

Its full findings are:

What strategies are UK employers considering (or have implemented) to bring employees back to work
Staggering return to work based on employees’ own health risks related to COVID-19 (e.g. respiratory or chronic conditions)	49%
Staggering employees return depending on how critical their role is to the business	46%
Creating smaller workgroups to limit mixing of employees/groups in the workplace	40%
Changing working hours to avoid busy commuting periods	34%
Offering employees the opportunity to volunteer to come back to the office	33%
Splitting employees into shifts based on specific criteria (e.g. by name A-M and P-Z work different days)	28%
Returning to work strategies will be based on local infection rates and risk (e.g. different strategies by location)	28%
Not sure, we have not yet considered a return to work strategy	29%

Lucy Bisset, director at Robert Walters, said: “What the research highlights is that despite the success of home working, employers are keen to start encouraging their staff back into the workplace and are happy to take necessary steps and put procedures in place to help enable this.

“A return to office brings about many perks, including social inclusion, better workplace collaboration, a separation of homelife, and a reinforcement of company values.

“What employers need to do is merge the perks of office-life with what people have been enjoying about working from home; for example – flexi-hours, a relaxed atmosphere, and avoidance of busy commute times.”

Robert Walters also found 87% of employees would like more opportunities to work from home post-return, with 21% stating they would like to work from home permanently.

While 83% of firms have stated that the experience of Covid-19 will encourage business heads to have employees to work from home more often, they also cite concerns over employee productivity (64%), senior leadership preferring traditional ways of working (57%), and the nature of the business e.g. face-to-face sales (36%), as the key barriers to achieving this.

They also expect the long-term impact of coronavirus on operations to include reduced mileage, greater use of technology and fewer company cars.  By Graham Hill thanks to Fleet News

Used car values for models less than two years old have dropped in June while prices for older, cheaper cars have risen, according to Cap HPI.

The average movement of five-year old cars is 1.2%, or £70, up during June, while 10-year old cars have increased by an unprecedented average of 5.7% or £140, at a time of the year when values invariably drop.

The overall price movement at the typical three-year, 60,000-mile fleet replacement point was an increase of 0.3%, the first average upward movement in June since 2009.

Values for younger vehicles dropped by 0.4% in the same period, however, they started to strengthen by June 15 as dealers became more active.

Derren Martin, head of valuations UK at cap hpi, said: “The strength of the used car market through June has taken even the most optimistic within the industry by surprise.

The question ‘how long does this carry on for?’ is one being asked far and wide at the moment, and there is no historical precedent to reference.

“Our Live valuation service will continue to track the market daily, and any fluctuations over the coming weeks will be reported real-time. As has happened in June, values for specific models can change in different directions over days or weeks, so keeping a close eye on daily valuations is essential at this time.”

Convertibles and cabriolets are among those that have been sought after, particularly models more than three-years-old.

While demand has been a significant factor in the average price movements, shortages of supply have also played their part says Cap HPI. The lack of new car activity has led to a shortfall in the numbers of part-exchanges being generated.

Logistics issues have also become a significant problem for the industry, with delivery lead times going from around 72-hours in early March to approximately 15-days in June.

Martin added: “Generally, the adage ‘what goes up must come down’  rings true with used car prices and is proven by movements in cap hpi used values over the years.

Once the current pent-up demand is exhausted and the supply chain gets back up to closer to full capacity, the market is likely to see volumes appear from lease and other finance extensions.

While this may not happen in July, it seems almost inevitable that the current strength is unsustainable and supply will at some point outweigh demand, maybe towards the end of the summer.”

Following the Coronavirus pandemic, fleet operators expect to have fewer cars and lower average mileages as the country faces severe economic decline. As the fleet sector curretly accouns for more than half of new car registrations, the knock on effect for the used market could be significant.  By Graham Hill thanks to Fleet News