December/January 2018

Snap-on announced as Top Technician 2018 sponsor NEWS The UK’s motor sector could be greatly disrupted by a hard Brexit, with vehicle manufacturing shut down and serious implications for parts supply, the parliamentary Business Select Committee has heard. At a session held on 14 November, representatives from vehicle manufacturers Aston Martin and Honda as well as the Society of Motor Manufacturers and Traders (SMMT) gave evidence on the implications for the motor industry if no trade deal is reached. They told MPs that the impact of the UK exiting the EU in March 2019 without a trade deal could be very serious for the motor manufacturing sector. In the event of a hard Brexit with no trade deal, there could be a Type Approval vacuum if UK Vehicle Certification Agency (VCA) approval were no longer recognised in the EU. Under this scenario, Aston Martin's chief financial officer Mark Wilson said the "semi-catastrophic effect” would be that Aston Martin would have to stop production. Parts supply On the issue of parts supply, Patrick Keating, Honda Motor Europe's government affairs manager explained that the company imports two million components each day from the continent on 350 trucks. The company had just one hour of stock on its shelves in the UK. Currently, Honda’s trucks take two minutes each to pass through customs. Keating said that if this rose to an estimated 17 minutes, the delay could cost the company £850,000 a year. "We're thinking about increasing the amount of warehousing and the amount of stock we would have to hold if friction entered the border," he added. "March 2018 is where we would want clarity around transition." Simply sourcing parts from non EU countries might not be so easy either according to SMMT chief executive Mike Hawes. "The average car made in the UK has 44% of its components from UK suppliers. “How much of that 44% actually comes from the UK,” continued Mike, “bearing in mind those suppliers are buying in supply chains from all over the world? The figure is more like 25%, which is a long way from the 60% threshold you would need to qualify for a free trade agreement." This could be addressed via a "cumulation" agreement with the EU according to Mike. This would allow EU content to count as being from the UK, with the reverse also applying. This would need to be arranged part of the Brexit trade deal. Implications for garage sector The repair sector would not be immune from the effects of a no-deal Brexit. Speaking to Aftermarket, Garage Equipment Association chief executive Dave Garratt said: “If there's no deal and a tariff is imposed, then any company purchasing garage equipment from Europe will pay the tariff and put the prices up. It will also mean they will try to source equipment from outside of the EU, if they can get it at a cheaper rate. “A lot depends on what UK trade deals are done with other countries. “If it puts a 10 per cent tariff on all equipment bought from the EU, then it could make lower quality equipment look much more attractive. You can stick 10% on a German brake tester but basically you can knock 20% off by buying a Chinese one. “Chinese product is cheaper, but it is the bottom end of the market.” On an optimistic note, Dave added: “at the end of the day, there needs to be a deal done one way or the other, and there will be.” www.aftermarketonline.net Brexit threat to motor sector “semi- catastrophic” MPs told 4 AFTERMARKET DEC/JAN 2018 www.aftermarketonline.net Snap-on has put its full weight behind Top Technician and Top Garage, signing up to sponsor the twin competitions for their 2018 run. The company was one of the main sponsors of Top Technician in 2017, and has been a long-term supporter of the competition. “It’s fantastic to have the ongoing support of such a vital and iconic company as Snap-on for Top Technician,” said Aftermarket editor Alex Wells. “Snap-on plays an important part in the daily life of mechanics, and of whole businesses. The first part of the equation was reflected in their existing support for Top Technician in previous years. Now we are expanding with Top Garage, it is fantastic to know they will be with us as we take the new competition forward alongside the existing contest.” Turn to pages 28-29 for all the latest on Top Technician and Top Garage 2018.