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The UK’s automotive trade body, the Society of Motor Manufacturers and Traders (SMMT), is calling on the UK Parliament to ratify the Brexit trade agreement.

MPs are debating the draft deal with the EU today (Wednesday, December 30) after Parliament was recalled to put the deal into law, a day before the UK severs ties with the European Union.

The SMMT wants the immediate ratification of the draft UK-EU Trade and Cooperation agreement (TCA), to ensure all automotive companies benefit from continued tariff-free trade from January 1.

It says that the draft TCA delivers across several areas for UK automotive, keeping the sector connected to a market that accounts for eight out of 10 of its vehicle exports.

Furthermore, the SMMT says that the TCA delivers on the core ask to avoid tariffs for most finished vehicles, parts and components.

Mike Hawes, the SMMT’s chief executive, explained that for automotive, Brexit has always been about “damage limitation”.

“The draft Trade Cooperation Agreement, while no substitute for the completely free and frictionless trade with Europe we formerly enjoyed, will address immediate concerns,” he said.#

“The TCA provides the opportunity for tariff and quota-free trade, foundations on which the industry can build.

“Even with immediate ratification, however, there will be just hours to adjust to new trading rules, so a phase-in period is critical to help businesses adapt.

“All efforts should now be made to ensure its seamless implementation, with tariff-free trade fully accessible and effective for all from day one.”

The SMMT says that the inclusion of specific provisions on transitional phase-ins for both electric vehicles (EVs) and batteries is also welcome.

However, it argues that the deal does not deliver some key asks, including formalising co-operation on the development of regulations and standards after the end of transition.

Nor does it prevent increased administration and potential for friction at the border, as we leave the single market and customs union, it said.

Hawes continued: “Further ahead, we must pursue the wider trade opportunities that Brexit is supposed to deliver while accelerating the UK’s transition to electrified vehicle manufacturing. 

“With the deal in place, Government must double down on its commitment to a green industrial revolution, create an investment climate that delivers battery gigafactory capacity in the UK, supports supply chain transition and maintains free-flowing trade – all essential to the UK Automotive sector’s future success.”

The eleventh-hour post-Brexit trade deal struck between the UK and the EU has been welcomed by the fleet and leasing industry.

It had faced a significant rise in costs, with tariffs imposed on cars and vans, if no deal had been agreed when the UK exits EU trading rules tomorrow (Thursday, December 31). By Graham Hill thanks to Fleet News

The Office for Low Emission Vehicles (OLEV) has attempted to clarify the types of hybrid cars and vans that will be allowed to remain on sale until 2035.

The Government have announced that new petrol and diesel cars and vans will not be allowed to be sold in the UK from 2030.

However, it said that it would continue to allow the sale of hybrid cars and vans that can drive a “significant distance with no carbon coming out of the tailpipe” until 2035.

BVRLA chief executive Gerry Keaney said that the 2035 extension for hybrids would provide an “essential lifeline” for those facing a greater zero-emission challenge.

However, he said that vehicle rental companies and van fleet operators would need “clarity on exactly what types of hybrid are in scope”.

Speaking at the Cenex Low Carbon Vehicle conference, following the Government announcement on the petrol and diesel ban,  Natasha Robinson, head of OLEV, said: “From 2035 all new cars and vans will need to be fully zero emission at the tailpipe and between 2030 and 2035 all new cars and vans must have significant zero emission capability.

“That means for example plug-in hybrids and what are called full hybrids would count, but what are known as mild hybrids, which just help with acceleration and deceleration, wouldn’t necessarily count as having significant zero emission capability.”

What constitutes significant zero emission miles hasn’t been decided yet, she said.

“What we are looking at is the really cleanest vehicles that are out there where the battery should be able to operate independently, so we would expect them to be able to operate as a zero emission vehicles for a certain amount of time – we will be talking to industry and talking to others more widely around defining that more tightly over the coming months – but at the moment just to be clear what we are looking at is those plug-in and full hybrids.”

Full hybrids include the likes of the Toyota Prius and the Kia Niro, while mild hybrids, which are rapidly becoming the norm on most engines, are offered by Ford, with MHEV engines on the Fiesta, Puma and Focus.

The BMW 320d and 520d are now mild hybrid too, while Volvo has all but one of its petrol or diesel engines as mild hybrid now (badged B instead of D or T).  By Graham Hill thanks to Fleet News

Fleet decision-makers and the leasing industry is bracing itself for a price hike on new company car and van orders in the event of a ‘no deal’ Brexit.

However, in a note from BMW, seen by Fleet News, the German manufacturer has announced a customs duty related increase of more than £3,000 on the recommended retail pricing (RRP) of the BMW i3, irrespective of whether there is a free trade deal or not.

BMW had announced at the beginning of October that BMW i3 models, along with the majority of other BMW models, would be subject to an “economic increase” in the recommended retail price rise from January 1, 2021.

Due to changes in the ‘Product Specific Rules of Origin’ legislation, it says that the maximum permitted content of non-EU and non-UK materials means these models will be subject to additional tariffs after the end of the Brexit transition period.

This will be the case, it adds, “whether or not there is a free trade agreement with the EU”, which means a further increase in the RRP of BMW i3 models is needed.

The current RRP for a BMW i3 (ZI3I), valid until December 31, is £35,120 – the previously announced RRP, to be effective from January 1, was £35,670. However, BMW says that the new RRP from January will now be £38,785 – an increase of more than £3,600.

Similarly, the current RRP for a BMW i3 (ZI3J), valid until December 31, is £37,650 – the previously announced RRP, to be effective from January 1, was £38,200. However, BMW says that the new RRP from January will now be £41,315 – again an increase of more than £3,600.

It says that for Direct Sales Agency Agreement vehicles, orders registered on or before December 31 will be charged the pricing valid on the date of order.

Meanwhile orders registered on or after January 1 will be charged as follows:

Vehicles which arrive in the UK on or before December 31 and which are marked sold on or before December 31 will be charged the pricing valid on the date of order as the vehicle will not incur additional import charges. Vehicles must be registered by April 30, 2021, to benefit from this pricing.

Vehicles which arrive in the UK on or after January 1, regardless of the date of order, or which are marked sold on or after January 1, will be charged at the new price, incorporating the customs duty increase and are not price protected.

BMW’s price hike comes after Renault issued its own price warning ahead of a free trade agreement not being reached.

In a letter from Renault’s fleet director, Mark Dickens, to customers, he says that the manufacturer has been in discussions with our factories to secure “increased production of vehicles and parts” to mitigate any risk of disruption to supply at the UK-EU border.

In addition, he said that Renault has increased capacity and staffing to ensure the “timely delivery of vehicles, parts and accessories to our customers”.

Any customer order created up to and including October 31, 2020, will be price protected regardless of the importation date, he says.

Any order placed from November 1 onwards, and that is matched to a vehicle imported from January 1, however, could be subject to revised pricing based on the imposition of vehicle tariffs.

In the event that tariffs apply on import, Renault says that those will be as per World Trade Organisation (WTO) terms, and will be added to the order price. Tariffs on WTO terms equate to 10% of the total new vehicle price including options.

Furthermore, it says any vehicle imported from January 1, ordered from November 1, could be subject to revised pricing based on the imposition of vehicle tariffs.

Finally, it says that any customer order created from January 1 would be subject to any new pricing irrespective of vehicle importation date.

Dickens wrote: “We will continue to closely monitor events and will keep you informed of any developments.”

Fleet News reported last month, how manufacturers had written to leasing companies warning them that they cannot guarantee company car prices beyond the end of the year, even for some models being ordered now.

In letters sent to vehicle lease provides by major carmakers, including BMW, Jaguar Land Rover and Mercedes-Benz, they say that the threat of a ‘no deal’ Brexit was to blame for the potential price hike.

Talks between the UK and EU are due to resume in Brussels at this 11^th hour. A free trade deal is looking less likely but still in the balance.

Any deal between the UK and EU would need to be ratified by parliaments on both sides, so time is running out for an agreement to be reached and to get the sign off before December 31.

Residual Value Concerns

A senior manager working at an FN50 vehicle leasing company, said the lack of clarity around pricing was a big issue for the industry.

He said: “Our view is that we should be advising clients to hold back on orders unless they choose from the manufacturers that have said they will honour prices.”

He envisages a number of cancellations from customers where any price protection doesn’t apply.

Furthermore, in terms of future residual values, he said they were in a state of “limbo”.

“There is an argument that they should increase proportionately to the increase in new vehicle prices,” he said, “but that would only be if we expected that the used market increases in value proportionately in three years’ time.

“There is an argument for that, but the future used values would then be increasing in value because of a one-off tariff that is being imposed rather than anything that relates to enhanced value.

“Such increases may be correct when looking at the actual price values of new vehicles, but it is also a value based on the future value prediction of a tax, which doesn’t feel quite right either.”

He continued: “If the tariff was imposed for just an – undetermined – period of time, and then taken away, what would happen to used car prices? Will they also increase now for a while and the turn back or will they stay at the higher value? Will future residual values also rise and then fall again in that scenario?

“In essence, the uncertainty will show through in the new car and used car market we believe and cause a de-stabilising effect. This is never good news for anyone in the automotive sector.”

‘Costly’ Brexit Preparations

The Society of Motor Manufacturers and Traders (SMMT) has revealed the cost to the sector of preparing for Brexit has surpassed £735 million, with more than £235 million spent in 2020 alone.

Most companies (67%) across the industry say they are doing everything in their control to prepare for new processes that will come into play on January 1, with 70% securing GB Economic Operators Registration and Identification (EORI) numbers, 60% spending significantly on stockpiling and 52% employing customs agents, as companies also try to prepare for any disruption or delay to supply chains.

However, significant gaps in the industry’s ability to plan still exist, with a lack of clarity on the nature of the UK-EU’s future relationship hampering the efforts of almost nine in 10 (86%) firms to prepare.

Critical questions remain unanswered. With the industry’s competitiveness built on Just-in-Time deliveries, companies cannot afford any supply chain delays so clarity on the operation of key new customs systems such as the Goods Vehicle Movement Service (GVMS) and the Permission to Progress (P2P) process, is vital, says SMMT.

Moreover, even if the UK and EU do conclude a Free Trade Agreement (FTA) from the end of 2020, there is uncertainty as to how companies will prove origin or products; if firms cannot do this then they will not be able to benefit from preferential trading terms.

Mike Hawes, SMMT chief executive, said, “As the UK-EU FTA negotiations enter the endgame, now is the time for both sides to deliver on promises to safeguard the automotive industry.

“Securing a deal is absolutely critical but it cannot be any deal. To work for UK automotive it must deliver for UK products and that means securing the right terms and conditions that allow our exports – now and in the future – to be zero tariff and zero quota trade.

A deal that failed to achieve this would be the equivalent to no deal at all, devastating jobs and slamming the brakes on the UK’s ambitions to be a world leading manufacturer and market for electrified mobility and battery technologies.”  By Graham Hill thanks to Fleet News

Cap HPI says it is prepared to handle any large volume shifts in pricing from manufacturers that may arise from a ‘no-deal’ Brexit.

Fleet News revealed last week how leasing companies are being warned about a potential price hike on vehicles if the UK and EU fail to strike a trade deal.

In letters sent to vehicle lease provides by major carmakers, including BMW, Jaguar Land Rover and Mercedes-Benz, they say that the threat of a ‘no deal’ Brexit is to blame for the potential price hike.

If no deal is reached and ratified before December 31, automotive trade body, the Society of Motor Manufacturers and Traders (SMMT), has previously warned that World Trade Organisation (WTO) non-preferential rules, including a 10% tariff on cars and up to 22% on vans and trucks would apply.

That would have equated to 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.

However, the UK is able to set its own tariff levels (as all countries can) and has since published the UK Global Tariff rates, which is the tariff schedule that will be adopted from January 1, 2021.

Following a consultation, the Government has agreed to simplify the tariff levels, with a 10% rate on all cars, vans and HGVs.

Manufacturers are working with Cap HPI on the scenarios relating to the potential charges and where the manufacturers have used the Cap HPI template, the new pricing change data will be ready in its system and visible in the event of a ‘no-deal’ Brexit.

It says that data will be available from January 1, 2021, to ensure fleets can continue to price vehicles accurately and easily.

Despite the Government’s target date of October 31 for a deal to be struck, negotiations are ongoing. If the protracted discussions end in a no-deal and no further talks are agreed, tariffs will come into force on January 1, 2021.

The impact will be significant, says Cap HPI, with vehicle manufacturers having to amend their vehicle and options prices to take these tariffs into account.

Jon Clay, head of vehicle identification at Cap HPI, said: “The team at Cap HPI has worked diligently with partners to ensure the new vehicle data systems are prepared for any eventuality.  If a no-deal Brexit is enforced, Cap HPI has ensured it has the teams in place to process the data supplied in an agreed format with the manufacturers.”

Vehicle manufacturers have been working closely with Cap HPI on a wide range of scenarios for some time to ensure a smooth transition for customers. Any pricing changes will start to be visible as early as the manufacturer allows, but most likely changing from January 1, it said. The changes will be made on a model range by range basis.

Experts at Cap HPI have offered guidance on the potential impact of Brexit on used car values.

Andrew Mee, head of forecast UK at Cap HPI, said: “As yet there is no evidence that Brexit concerns are having a negative effect on used car values.

“An outcome that sees tariffs on new cars may result in a reduction in new cars sales, which would be good news for used values.

“In the short term, higher new car prices may pull up some used prices, especially for newer cars.”

However, he said used values are still likely to fall during 2021 as the negative impact of coronavirus on consumer confidence, which could be worsened if Brexit has further negative impact on GDP and unemployment, is likely to outweigh the positive impact of higher new prices.

In the longer term, from three years into the future, the reduction in used supply should help lift used values, which by then Cap HPI expects will have recovered from the coronavirus impact.

Mee concluded: “We will not be altering our future value forecasts until we know for certain that tariffs are being introduced, how long they might last for, and post Brexit economic forecasts are updated, so that we can fully assess the broader picture.” By Graham Hill thanks to Fleet News

Fiat Chrysler Automobiles (FCA) is the latest manufacturer to face an emissions-based legal battle in the UK, as law firm PGMBM claims the manufacturer misled customers through the use of emissions ‘defeat’ devices.

PGMBM, which has also launched legal action against Mercedes-Benz and the Renault Nissan Alliance, says up to half a million of vehicles with FCA Group engines, manufactured since 2008, could be affected in England and Wales, .

Owners could be due £10,000 in compensation, if the claim is successful.

PGMBM managing partner Tom Goodhead said: “Fiat Chrysler Automobiles have misled drivers about the true diesel emissions that many of their vehicles produce. This is yet another instance of a huge automotive firm conning consumers – with a significant impact on the environment and our collective wellbeing.

“FCA must be held to account for these practices, and this case will give consumers the opportunity to pursue some justice and be compensated for being misled by a company that they may have trusted.

“Legally, consumers could be entitled to anything up to the full cost of the affected vehicles. But based on similar legal actions around the world, we believe that £10,000 per claimant should be expected.”

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

According the PGMBM, potentially illegal software was used in the engine management systems used in Alfa Romeo, Jeep, Fiat and Suzuki cars, plus Iveco and Fiat commercial vehicles.

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

A full list of potentially affected models can be viewed below.

In 2019, FCA agreed to a settlement worth $800 million to resolve claims from the US Justice Department and the state of California relating to the use of illegal software that produced false results on diesel-emissions tests.

The new claim alleges that FCA committed fraud by manufacturing vehicles whose true diesel emissions far exceeded the limits imposed by EU and UK laws.

An FCA spokesperson said: “FCA believes this claim to be totally without merit and we will vigorously defend ourselves against it.”

Potentially affected vehicles with FCA’s diesel engine:

Make / Model	1.3 litre	1.6 litre	2.0 litre	3.0 litre	3.0 litre (V6)
Fiat	500 500C 500L 500X Doblo Fiorino Panda Punto Punto Evo Grande Punto Qubo Tipo	500L 500X Bravo Doblo Grande Punto Punto Evo Scudo Talento Tipo	500X Bravo Doblo Ducato Scudo Talento	Ducato	–
Alfa Romeo	MiTo	Guilietta MiTo	159 Brera Guilietta Spider	–	–
Jeep	–	Compass Renegade	Cherokee Compass Renegade	–	Grand-Cherokee Commander
Suzuki	–	SX4 Vitara S-Cross	–	–	–
Iveco	All models

By Graham Hill thanks to Fleet News

Manufacturers are warning leasing companies that they cannot guarantee company car prices beyond the end of the year, even for some models being ordered now.

In letters sent to vehicle lease provides by major carmakers, including BMW, Jaguar Land Rover and Mercedes-Benz, they say that the threat of a ‘no deal’ Brexit is to blame for the potential price hike.

If no deal is reached and ratified before December 31, World Trade Organisation (WTO) non-preferential rules, including a 10% tariff on cars and up to 22% on vans and trucks would apply.

That would equate to 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, according to UK Automotive Trade Report from the Society of Motor Manufacturers and Traders.

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

A price hike could see rentals increased and result in company car drivers paying more in benefit-in-kind (BIK) tax thanks to higher P11d prices.

Mercedes-Benz says in a letter sent to leasing companies, that it will guarantee the prices of all Mercedes-Benz and Smart cars ordered before Saturday (October 31), that have a quoted UK delivery date on its ordering system prior to December 31, regardless of its arrival date into the UK.

Mercedes-Benz said: “Should a customs duty tariff become applicable on cars imported into the UK after leaving the EU Customs Union and Single Market, we would look to increase the price of our cars accordingly, to offset the amount of the tariff (unless covered by the stated price protection).

“The increase would be applicable to all vehicles and factory fitted options, whether marked sold or unsold and regardless of the order, allocation date or sales channel. This would potentially vary model by model.”

BMW issued its warning a few weeks before MB, saying that “unless there is a free trade agreement with the EU, additional customs duties are likely to be applied to BMW and MINI vehicles imported into the UK”.

“This means that any vehicles which are delivered into the UK on or after January 1, 2021, regardless of date ordered, may have additional customs duties imposed on them,” it said.

“Should there be a no-deal Brexit, BMW UK will provide details of the implications of that including any price changes for vehicles as soon as possible.”

It added that “orders must be confirmed within the BMW Retailer ordering system on, or before December 31 to receive price protection against the economic price increase”.

“Any unfilled orders will be highlighted to you by the supplying retailer or leasing company and will not be price protected. Economic price protection does not include the potential additional customs duties.”

It was similar warning from Jaguar Land Rover (JLR), which said it is “not in a position to guarantee pricing for vehicles that are registered after December 31”.

All vehicles, regardless of build location, it says may be subject to a price increase when registered from January 1, 2021.

Meanwhile, Volkswagen Group in a letter sent to leasing companies, on behalf of its VW, Audi, Seat, VW Commercial Vehicles and Skoda brands, says it is closely monitoring developments surrounding the UK’s transitional period.

As part of its preparations, it says that it has established an understanding of all Brexit eventualities and is “confident” of its readiness.

Actions it has taken include: obtaining an EORI number (used for customs declarations); optimising stock availability to mitigate the risk of supply constraints; appointing customs agents allowing it to import cars and parts into the UK in line with HMRC regulations; and implementing and tested required systems changes.

It adds that in the event of a ‘no deal’ Brexit, the “application of import tariffs and/or increases to prices are required, then we will communicate our plans to deal with this as quickly as possible”.

“In the meantime, we reserve the right to amend the price/discount of vehicles at any time if a change to regulation, legislation, application of tariffs, duties, taxes or other charge/event causes an increase to the costs of supply of vehicles,” it said.

Trade talks between the EU and the UK Government are ongoing.

Northern Ireland Secretary Brandon Lewis said the extended talks were “a very good sign” a deal can be done.

But he told the BBC: “We have got to make sure it is a deal that works, not just for our partners in Europe… but one that works for the United Kingdom.”

The two sides are thought to be working on legal texts, but Whitehall sources have indicated major sticking points – like fishing rights and competition rules – remain unresolved.

The UK left the EU on January 31 but has been in a transition period – continuing to follow EU rules and pay into the bloc – while the two sides try to agree a post-Brexit trade agreement.  By Graham Hill thanks to Fleet News

The classification of journeys is causing a headache for fleets, because of the rise of homeworking due to coronavirus, says the Association of Fleet Professionals (AFP).

Describing the problem as ‘The New Commute’, the AFP says that problems revolve around whether an employee’s home is now officially their place of work.

AFP chairman Paul Hollick explained: “If someone is working from home rather than the office, then it raises the question of which is actually their place of work. This is important when it comes to both expenses and risk management.

“For example, if someone now drives their own car to the office once a week, are they allowed to reclaim their travel costs using AMAP rates, as they would for any other business journey that they undertake?

“The other major issue is whether, if someone now uses their own car to travel from home to work, whether that is now seen as a business journey from a risk management point of view, rather a commute.”

HMRC rules

Hollick says that the HMRC rules in this area were often inconsistently applied. Normally, they were based on the employee’s contract of employment showing that they were home-based but there was also a reasonableness test, to ensure that the employee is working from home rather than the office for a proportionally greater length to time.

“As always with points of taxation,” Hollick explains, “it is better to have hard and fast rules but these are open to local interpretation and fleets can potentially suffer from a lack of uniformity.”

He added that the issue of risk management was probably clearer but also open to some degree of interpretation.

“Any employees who work from home for the majority of time but sometimes visit the office using their own vehicles have, strictly speaking, all become grey fleet – and should be subject to all the usual grey fleet management practices,” he said.

“Again, we have yet to hear from any fleets who have been in touch with the Health and Safety Executive about this but it is an area that would benefit from future clarification.”

The pandemic is creating a series of questions for fleets that AFP members were currently discussing and to which they were attempting to find solutions.

“The New Commute is just one of a series of issues that we are working hard to resolve for members but sharing best practice ideas,” said Hollick.

“It is at times such as now, when so much surrounding fleet management is fluid, that the AFP can really add value.”

The AFP was formed in March from the merging of the Association of Car Fleet Operators (ACFO) and the Institute of Car Fleet Management (ICFM).  By Graham Hill thanks to Fleet News

Electric cars are set to treble their market share in Europe this year, but an environmental campaign group is warning the UK could face long lead times in 2021.

Despite the pandemic, electric vehicle (EV) sales have surged since January 1 and will reach 10% this year and 15% in 2021, says Transport & Environment (T&E).

But, with carmakers having to meet targets to reduce the average emissions of the cars they sell in Europe, or pay fines, T&E says the UK supply of EVs is likely to dry up next year in the absence of British regulations equivalent to those in Europe.

Greg Archer, UK director at T&E, said: “Electric car sales are booming thanks to emissions standards. Next year, one in every seven cars sold in Europe will be a plug-in. European manufacturers have EVs to sell, but from January they’ll have no incentive to sell them in the UK unless the Government requires them to do so.”

From 2021, UK sales of EVs will not help manufacturers achieve EU standards. T&E says that the Government has so far failed to make parliamentary time available for equivalent new UK regulations to encourage sales here. These must be introduced by the end of October to be in place by January and maintain supplies of electric cars to the UK, it says.

Furthermore, it claims that the current draft regulation contains errors that will lead to about a fifth less EVs being sold in the UK than was likely if it had remained a part of the existing EU scheme. This is despite Government claims that the rules are equivalent to those in the EU.

The Department for Transport (DfT) has dismissed the claims.

Archer continued: “The electric car is becoming mainstream, but we risk turning off the tap in Britain.

“Carmakers will prioritise EV sales in markets where laws and tax breaks encourage them most, but the UK’s proposed standards are too weak and maybe too late.

“Government needs to quickly introduce regulations equivalent to the EU’s in 2021, or demand for electric cars will outstrip available supply and drivers will be left with long waits to secure their new electric car which will be more expensive.”

Read more on the UK analysis from T&E – UK Car CO2 Regulations: Going nowhere fast.

By Graham Hill thanks to Fleet News

More people are wanting to travel on their own in their own vehicle due to Covid-19, leading to an increase in private car usage for business journeys, says Jaama.

As a result, the fleet software company believes the management of grey fleet drivers should be a priority for employers.

As mentioned below if employees are now working from home then travelling to the office will now be classed as a business trip.

“Duty of care information needs to be captured and managed properly to ensure drivers are only using grey fleet vehicles which are safe, legal and appropriate for business use,” explained Martin Evans, managing director of Jaama, and director of the Association of Fleet Professionals (AFP).

“Companies who just pay allowances and mileage reimbursements without any diligence do so at their peril.”

Jaama says the buoyancy of the used car sector for four to seven-year- old sub-£10,000 cars, suggests more people are updating their own car to carry out more journeys for work purposes.

Evans continued: “Many fleet managers need to make a concerted effort to ensure they gain control of their grey fleet to avoid big problems in the future. All the signs are that the grey fleet car parc will continue to grow over the coming years.”

Fleet News has previously reported how long-term changes to the way people work could result in more employees becoming grey fleet drivers.

Paul Hollick, co-chair of the Association of Fleet Professionals (AFP), warned that this could have significant consequences for fleets, with more employees joining the ranks of those that drive their car for work, the so-called grey fleet.

Employers have a legal obligation to ensure that grey fleet vehicles are reasonably safe to use, are fit for purpose and are lawfully on the road.

Companies also typically pay Approved Mileage Allowance Payments (AMAPs) to reimburse fuel used in the course of a work trip at 45p per mile.

“Grey fleet could become a bit of a battleground, because of Covid-19,” warned Hollick. “Employees won’t be office-based (in the future), they’ll be home-based, which means their contract of employment might be changed.

“If the employee is classed as home-based rather than office-based a journey from home to the office will then become a business trip.”  By Graham Hill thanks to Fleet News

Automotive companies from across the UK and EU are calling for an ambitious free trade deal, warning that ‘no deal’ will have a catastrophic impact on the industry.

If no deal is reached and ratified before December 31, World Trade Organisation (WTO) non-preferential rules, including a 10% tariff on cars and up to 22% on vans and trucks would apply.

Such tariffs – far higher than the small margins of most manufacturers – would almost certainly need to be passed on to consumers, making vehicles more expensive, reducing choice, and impacting demand. Furthermore, automotive suppliers and their products will be hit by tariffs, they say.

New calculations, published on Monday, September 14 by the Society of Motor Manufacturers and Traders (SMMT), suggest that a reduction in demand resulting from a 10% WTO tariff for cars and vans could reduce EU and UK factory output over the next five years by three million units.

That would equate to losses worth €52.8 billion (£48.7bn) to UK plants and €57.7bn (£53.2bn) to those based across the EU. Suppliers would also suffer from these changes, it says.

The lead organisations representing vehicle and parts makers across the EU, the European Automobile Manufacturers Association (ACEA) and the European Association of Automotive Suppliers (CLEPA), along with 21 national associations, including the SMMT, have joined forces to warn that this combined loss in trade value would seriously harm one of Europe’s most valuable assets.

Collectively, the EU27 and UK automotive sector is responsible for 20% of global motor vehicle production and spends some €60.8bn (£56bn) on innovation each year, making it Europe’s largest R&D investor.

The SMMT’s chief executive, Mike Hawes, said:  ”These figures paint a bleak picture of the devastation that would follow a ‘no deal’ Brexit.

“The shock of tariffs and other trade barriers would compound the damage already dealt by a global pandemic and recession, putting businesses and livelihoods at risk.

“Our industries are deeply integrated so we urge all parties to recognise the needs of this vital provider of jobs and economic prosperity, and pull out every single stop to secure an ambitious free trade deal now, before it is too late.”

The industry says that any deal should include zero tariffs and quotas, appropriate rules of origin for both internal combustion engine and alternatively fuelled vehicles, plus components and powertrains, and a framework to avoid regulatory divergence.  

Crucially, it says that businesses need detailed information about the agreed trading conditions they will face from January 1, 2021, to make preparations. This, combined with targeted support and an appropriate a phase-in period that allows for greater use of foreign materials for a limited period of time, will ensure businesses are able to cope with the end of the transition period.

Eric-Mark Huitema, ACEA director general, said: “The stakes are high for the EU auto industry – we absolutely must have an ambitious EU-UK trade agreement in place by January. Otherwise our sector – already reeling from the COVID crisis – will be hit hard by a double whammy.”  By Graham Hill thanks to Fleet News