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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

As we move from lockdown to a relaxing of the rules around travelling, office working and social distancing, what will be the long-term impact on business transport and travel?

There are some short-term implications, including a reluctance to use shared services, from car share to public transport, and far less road travel due to people working from home (note – while Department for Transport stats show daily traffic levels now rising again, the peak congestion times remain way below usual levels, indicating new reasons for travelling during the day).

Local authorities are spotting an opportunity to consolidate new active behaviours with pop-up cycle lanes and wider pavements, but, ultimately, what does all this mean for fleets?

Many businesses are now considering new agile working practices which will allow their staff to work more often from home. Their need to commute will reduce, but will this change their need for a car?

I don’t think so. If you work in the city, chances are you commute on public transport; and if not now, you may not have a choice in the future as congestion charging and workplace charging schemes accelerate across major conurbations. But you will still need a car for leisure purposes, and, maybe, the occasional business trip.

Would you rent or join a subscription scheme? Possibly, and there are plenty now on offer. But they don’t offer ‘drop-of-a-hat’ access; you have to plan ahead. And the emergence of electric vehicles arguably knocks all of this into a cocked hat.

This year, a company car driver will pay no taxfor a pure electric car. Next year, they will pay 1% benefit-in-kind tax – or £60 a year on a £30,000 car – and for each of the three years after that, they’ll pay £120 for same car.

Show me the subscription scheme that can compete with that price.

Employee demand for company cars will remain. It might drop slightly, but it might even rise as cash takers wake up to the savings. And this is supported by Fleet Intelligence research which shows fleet sizes will, on balance, increase, with much of the growth driven by electric cars.  By Graham Hill thanks to Fleet News

I’m not really sure why I would include such an article in my newsletter other than the fact that some people actually like this sort of information. So for the nerds amongst us – and I mean that in a cuddly friendly way here is the best motorway as well as the best A Road!

The M11 has been rated the best motorway in England in Transport Focus research covering the year to March 2020.

In the 2019/20 Strategic Roads User Survey the motorway from London and Cambridgeshire had the highest overall satisfaction of 92%.

The best ‘A’ road was at the other end of the country, the A66 route across the Pennines from Scotch Corner to Penrith.

This is the second year of the independent watchdog’s new survey looking at the views of over 8,000 road users about their last journey on a motorway or major ‘A’ road managed by Highways England.

Anthony Smith, chief executive of Transport Focus, said: “In the 12 months before the coronavirus lockdown, more than three out of four drivers were satisfied with their journey on England’s motorways and major ‘A’ roads – but some roads score much better than others.”

Drivers were least satisfied with the M20 (which links London and Dover), for the second year in a row.

Commenting on the M20, one driver said: “Get the roadworks done – it’s been 50mph for too long – must be two years possibly…”

Commenting on an M11 journey, a driver said: “Easy way to go, everything went well, no roadworks or holdups.”

Commenting on their experience on the A66, another said: “Quick journey, no hold ups.”

The survey also found that 92% of drivers felt safe on their journey and the overall satisfaction with road surface quality was 83%.

81% of road users were satisfied with their last journey using a motorway or major ‘A’ road managed by Highways England and 79% were satisfied with the journey time.

However, the management of roadworks was lower, 68% of those surveyed were satisfied in this area.

Smith said: “As drivers return to the roads it is vital that management of roadworks is looked at. With just 68 per cent of drivers satisfied this is clearly an area for Highways England to keep focussing on.

“Our research shows that if you’re happy with journey time, you’ll be happy with your journey overall. That’s an important message for Highways England as traffic starts to get back to pre-lockdown levels.”

The least happy road users were commuters at 76% satisfied, followed closely by those travelling on business at 77%. Among drivers of vans and lorries 78% were satisfied with their journey.

The Strategic Roads User Survey became the formal measure of satisfaction among users of Highways England’s roads in April 2020 as part of the Government’s second Road Investment Strategy. By Graham Hill thanks to Fleet News

Fleets and private motorists are being warned about an increased risk of drug driving as employees return to work from furlough.

The warning, from a major supplier of drug driver testing equipment, comes as figures from the police show how drug driving is becoming more prevalent than drink driving.

D.tec International, which supplies the ‘DrugWipe’ roadside test kits to every police force in England, Wales and Scotland, says the figures are “shocking”.

During the first six months of the year, the combined number of drug drive arrests for three police forces was 50% higher than those for drink driving.

In Essex, there were 1,323 arrests for drug driving, more than double the number of those for drink driving (647).

In Merseyside, it was the same story, with 1,121 drug drive arrests and 570 for drink driving. But in West Yorkshire, the figures for drink and drug driving, while still high, were on a similar level, with 1,235 drug driving arrests and 1,178 for drink driving.

Police forces started reporting arrests for drug driving had surpassed drink-driving for the first time, last year.

Ean Lewin, managing director of D.tec International, said: “I know I have been going on about the magnitude of drug drive versus drink drive for a number of years, but even I am shocked by the recent arrest figures for the first half of 2020.

“During the last few months during lockdown, it got even worse.”

In 2019, Merseyside became the first force to record more than 2,000 annual drug drive arrests – and there were more than a dozen forces with more or equivalent drug drive arrests, compared to those for drink driving.

Looking specifically at the lockdown period alone, in April and May 2020 Essex Police recorded two-and-a-half to three times more drug drive arrests, compared to drink drive.

Lewin continued: “The issue is that companies are bringing back these employees from furlough and simply not looking at the drug and alcohol issues that have been created.

“The EMCDDA (European Monitoring Centre for Drugs and Drug Addiction) has been looking at this issue during the lock down period, and in an extensive report says that ‘those who use drink or drugs are now using more’.”

Furthermore, Lewin says he has heard of companies seeing employees coming back to work who have “needed a crutch” in the form of alcohol or drugs during lockdown – and are now asking for help to deal with the issue.

Four out of five respondents to a Fleet News poll said drug-driving had become such a safety issue for fleets that they think employers should be routinely testing company car and van drivers.

At the time, the National Police Chiefs’ Council (NPCC) lead for roads policing, chief constable Anthony Bangham, said he was “concerned” to see the increase in the number of motorists testing positive for drugs.

He told Fleet News public perception of the issue needs to change.

“Drink driving is considered socially unacceptable by the vast majority of the public, yet the emergence of drug-driving is perhaps not yet seen in the same way,” he said. By Graham Hill thanks to Fleet News

The European Commission has started the regulatory work aimed at setting the next stage of type approval requirements for vehicle emissions, it will be known as Euro 7/VII.

Following a public consultation, which ends in November 2020, the Commission will carry out an evaluation of the current Euro 6/VI vehicle emission standards to assess its impact to date.

The evaluation will assess to what extent the Euro 6/VI vehicle emission standards have achieved their objectives of harmonising the rules on pollutant emissions from vehicles and improving air quality by reducing pollutants emitted by road transport.

The existing vehicle emission standards include real-driving emissions (RDE) testing for cars and vans and portable emission measurement systems (PEMS) testing for lorries and buses. Since its introduction, and subequent revisions, this has led to an improvement in the emissions performance of vehicles.

The European Commission, however, believes that the current standards do not sufficiently contribute to the decrease in air pollutant emissions emerging from road transport, required for the move towards zero-pollution in Europe.

It believes there are three areas that prevent Euro6/VI from being effective and wants to resolve them with the new standards.

The first issue is complexity. There are separate regulatory frameworks for vehicle types, different dates of entry into force for Euro 6/VI steps, many different emission tests and differences in emission standards based on fuel and technology.

This complexity requires time and significant resources for both manufacturers and national authorities, which has led to a high testing and administrative burden, as well as a risk of misinterpretations in the application of the standards.

The European Commission also believes that the current emission limits no longer represent the available emission reduction technology.

Lastly, it says that real-world emissions are still not measured under all conditions of use in Euro 6/VI and are not monitored throughout the entire lifetime of the vehicle.

As a result, the Commission has identified a preliminary set of policy options to achieve the specified objectives. They will be revised once all the results of the evaluations/studies are available.

• Option one will consider a narrow revision of Euro 6/VI and would involve setting up a single air pollutant emissions standard for cars, vans, lorries and buses. It would also involve simplifying the existing emission tests while keeping a focus on real-world testing
• Option two will consider a wider revision of Euro 6/VI by including more stringent air pollutant emission limits for all vehicles. This would involve stricter emission limits for regulated air pollutants and/or new emission limits for currently non-regulated air pollutants
• Option three will consider a comprehensive revision of Euro 6/VI by introducing real-world emission monitoring over the entire lifetime of a vehicle. Data on air pollutant emissions collected through on-board monitoring (OBM) would subsequently support market surveillance and in-service conformity testing

An implementation plan is not planned at this time, but one may be considered when the preferred option has been selected. The European Commission says this implementation plan would address the possible implementation challenges that the preferred option will face. By Graham Hill thanks to Fleet News

It is now felt that whilst the ban will initially relate just to commercial and large passenger carrying vehicles it won’t be long before the legislation will spread to cars.

Tyres aged ten years and older will be banned from lorries, buses and coaches on roads in England, Scotland and Wales in a boost to road safety.

The ban follows an investigation, including research commissioned by the Department for Transport (DfT), which indicated ageing tyres suffer corrosion which could cause them to fail.

It will be illegal to fit tyres aged ten years or older to the front wheels of lorries, buses and coaches, and all wheels of minibuses, under the new rules.

The secondary legislation will be laid in the autumn and will also apply to re-treaded tyres – with the date of re-treading to be marked – making the age of the tyre clearly visible.

Roads Minister Baroness Vere said: “In the same way that you wouldn’t drive a car with faulty brakes, ensuring your tyres are fit for purpose is crucial in making every journey safer.

“Taking this step will give drivers across the country confidence their lorries, buses and coaches are truly fit for use – a safety boost for road users everywhere.

“This change is in no small way the result of years of campaigning, particularly from Frances Molloy, to whom I thank and pay tribute.”

Frances Molloy’s son Michael died in a coach crash, where the vehicle had a 19-year-old tyre fitted to the front axle of a coach in 2012. Since the accident, Molloy has campaigned to see the law changed.

Drivers, owners and operators are responsible for the safety of their vehicles –this will also now include ensuring their vehicle’s tyres meet the new requirements.

The DVSA will continue checking tyre age as part of their routine roadside enforcement activities, and adding an additional assessment to the Annual Test scheme (MOT test). By Graham Hill thanks to Fleet News

Tesla has been banned from making claims that its cars have “self-driving” technology by a court in Munich.

The ruling prevents the company from making references to the potential of its Autopilot driver assistance system that could mislead customers to think that the car can drive itself.

Autopilot combines adaptive cruise control and lane-keep assist with various other safety systems and can perform driving tasks for extended stretches with little or no human intervention, however it is not an autonomous driving system and the driver must remain in control of the vehicle at all times.

The case was bought by Germany’s Wettbewerbszentrale fair-competition group, which objected to claims on Tesla’s website promising “full potential for autonomous driving” including “automatic driving on motorways”.

Matthew Avery, research director at Thatcham Research, said: “We have long warned of the pitfalls to the Autopilot system. Its seemingly competent performance can encourage drivers to hand too much control to the vehicle and lose sight of their responsibilities behind the wheel.

“This is a progressive process that begins when motorists are marketed the ‘self-driving’ experience.

“Autopilot is not a self-driving system. It is there to provide driver assistance, not become an invisible chauffeur.”

Thatcham Research supports the German court’s ruling, stating that “Autopilot” is a misleading term.

Avery said Tesla’s marketing frequently suggests the car is capable of ‘full self-driving’ and he highlighted that some UK Tesla customers recently received an email communication stating: “Our records indicate that you haven’t upgraded your Model S to Full Self-Driving Capability. You can upgrade now at a reduced price of £2,200.”

Tesla’s Autopilot system has repeatedly come under fire in the wake of numerous accidents that have occurred while the system was engaged.

In February, an investigation into a fatal crash involving a Tesla Model X being driven on autopilot in Mountain View, California, found that the driver was distracted using his mobile phone. 

It was determined that the Tesla Autopilot system’s limitations, the driver’s overreliance on the Autopilot and the driver’s distraction – likely from a mobile phone game app – caused the crash.

The National Transportation Safety Board (NTSB) found that the Tesla vehicle’s ineffective monitoring of driver engagement was determined to have contributed to the crash.

Tesla’s chief executive Elon Musk said the company is “very close” to making its cars capable of automated driving without any need for driver input.

“I’m extremely confident that Level 5 or essentially complete autonomy will happen and I think will happen very quickly,” he said at the opening of Shanghai’s annual World Artificial Intelligence Conference. By Graham Hill thanks to Fleet News

Toyota has developed a new cabin safety screen to help mitigate the risk of coronavirus transmission for its UK private-hire taxi driver customers and their passengers.

The screen, which has been approved for use by Transport for London (TfL), is made from clear polycarbonate material that Toyota says can reduce the chances of virus transmission.

It is compatible with all recent Prius models and the full Corolla range – hatchback, touring sports and saloon.

Toyota is currently awaiting approval for the screen on larger models like the seven-seat Prius+ and RAV4 SUV.

Installation by Toyota-qualified technicians is required but takes about 10 minutes.

The Japanese manufacturer said the process involves no structural changes and does not damage the car’s interior; the screen is held in place by large tabs on its lower edge that are inserted in the front seatback pockets.

Toyota’s own testing showed that the screen remained securely fixed, even when driving at high speeds with the windows open.

The screen is clear and has a central opening flap for card or cash payments to be made. As well as being suitable for cabs, the system can also be used for demonstration vehicles and accompanied test drives.

The screens are being made by Toyota Manufacturing UK and are available to order through Toyota retailers nationwide. Recommended retail prices, including VAT and fitting, are £195 for the medium screen and £210 for the larger version.

Stuart Ferma, Toyota and Lexus fleet general manager, said: “Transportation services everywhere are having to be adapted to take the risk of coronavirus transmission into account.

“We recognise the particular vulnerability of cab drivers and have come up with a solution we believe is effective and reasonably priced.” By Graham Hill thanks to Fleet News

The average electric vehicle (EV) driver spends £310 per year on electricity to charge it at home, according to a new study by Uswitch.

The energy comparison service calculated the cost based on a typical EV covering 10,000 miles per year at the UK’s average electricity price per kWh.

It also calculated the cost of charging an EV in different countries around the world, based on the average price and mileage in those territories.

The UK ranked as the 10^th most expensive out of 50 countries in the study, with the most expensive country to charge an electric vehicle revealed as Denmark, followed by Germany and Belgium.

Average annual EV charging cost:

Country	Annual Charging Cost Per Person
Denmark	£486.59
Germany	£412.87
Belgium	£398.12
Italy	£383.37
Ireland	£383.37
Portugal	£353.88
Spain	£339.14
Austria	£324.39
Japan	£324.39
United Kingdom	£309.65

Sarah Broomfield, energy expert at Uswitch, said: “The use of electric vehicles has clear environmental benefits but for many consumers, the choice to move to EVs can be hindered by perceptions about how much it will cost to charge.

“This research shows that, while the costs are not insignificant, the UK is in a strong position compared to countries like Denmark where the price of electricity makes the cost of a charge so much higher.

“Of course, as well as the cost savings of rapid charging points, we also encourage consumers to regularly review their own energy tariffs to ensure they’re getting the best deal possible.”

The current advisory fuel rate (AFR) for an alternative fuel vehicle is 4ppm, meaning drivers can claim £400 for every 10,000 business miles covered. By Graham Hill thanks to Fleet News