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Brexit Update

and the impact on the leasing industry

Ogilvie Fleet remain vigilant of the developing situation surrounding the UK’s Brexit transitional period, which ends on 31 December 2020.  As part of our preparations, we are monitoring all eventualities, as well as the differing position of manufacturers and other relevant suppliers. Where we have received specific statements from manufactures, they are stated further down this web page. 

We are aware that there is the possibility of additional tariffs on certain (not all) imported vehicles and thus the chance of increased prices. However, the UK is a huge market for many European manufacturers and our view is that they will not want to lose registration numbers as a result. None the less, net acquisition prices could increase and this may well cause a consequential reduction in sales volumes. The effect of increased prices and lower sales volumes could, nevertheless, potentially have the effect of increasing residual values, which in turn could mean we would not need to pass on the whole of any net price increase to our clients. 

Where manufacturers are allowing price protection, we will be honouring those positions as we have always done. Where manufacturers are insisting on immediate price increases, we will be discussing the relevant impact with our clients on a one-to-one and as-required basis. 

It is also possible that there could be some vehicle and parts supply issues. Many manufacturers are already stockpiling vehicles and parts to protect against such supply problems and we are in contact with all suppliers to ascertain their positions in this regard and thus, where possible, protect ourselves and our clients. 

It is also possible that vehicle parts prices may be affected, but contract hire inherently protects against such rises and thus those costs (if applicable) would not be passed forward to clients on any existing leases. There may be a need to pass these on in the costs of future leases none the less. 

We will of course keep our clients fully informed of any changes, as always, when and if they occur and we will continue to work closely with all manufacturers and other suppliers throughout the whole of the transition process in order to minimise any disruption.

This page will be updated with information supplied to us from manufacturers regarding their stance on the impact of Brexit.

Kia – 17th December 2020

Whilst we continue to hope for positive news of a Brexit trade agreement between the UK and the EU, we have been planning for a “no deal” scenario for many months. Following the recent direction from the Prime Minster that “now is the time to prepare”, we want to update you on these plans, including the impact of the potential introduction of a 10% import tariff on Sportage and Ceed family vehicles.

Affected Models: Ceed 5dr Hatch, Ceed Sportswagon, Ceed Sportswagon Plug-in Hybrid, ProCeed, XCeed, XCeed Plug-in Hybrid, Sportage

Price Protection

In the event of “no deal” and the introduction of an import tariff I can confirm that we will offer price protection for vehicles that are on order, to enable you to trade with confidence throughout this period of unprecedented instability. Price protection will apply in the following circumstances:

– All vehicles ordered prior to the 31 January 2021

– All vehicles must be registered no later than 31 March 2021

– Please note that price protection does not apply in the case of any future tax changes, e.g. increases in VED, VAT or First Registration Fee.

Suzuki – 15th December 2020

With the final Brexit outcome still unknown, there are several uncertainties faced by the automotive industry concerning trading conditions after 31st December 2020. Whilst Suzuki GB will continue to monitor political developments and work to minimise any potential disruption to our business, we want to provide you with some pricing information to help you trade with confidence with Suzuki GB for the remainder of quarter four and quarter one 2021.

SGB can confirm that all vehicles registered in quarter one 2021 will not incur any additional price increases should the UK Government be required to implement and collect tariffs on cars imported into the UK from the EU.

Volvo – 11th December 2020

Volvo have previously price protected all factory orders placed for delivery before 31st March 2021.

This position has now changed and that price protection will end at Close of Business on the day that any No Deal is announced.

Toyota – 6th November 2020

At this current time the UK Government has not been able to successfully negotiate a Free Trade Agreement with European Union that would avoid the imposition of tariffs on vehicles that enter the UK after the 31st December 2020.

With certain orders now showing delivery dates for January and beyond, we are aware that you will be keen to understand our position on tariffs for vehicles ordered before the end of the year but delivered in 2021.

We can therefore confirm that we will apply price protection on all such vehicles to enable you to once again trade with confidence and reassure customers that they will not be disadvantaged by committing to place an order before the full outcome of the BREXIT negotiations are finalised.

Ford – 6th November 2020

Following the UK’s withdrawal from the European Union (EU) on 31st January 2020, the UK has been operating in a transition period which runs until 31st December 2020. This period has allowed the UK to continue to operate with existing EU trade agreements whilst new agreements are negotiated.

From January 1st, 2021, following the end of the transition period, the UK will no longer be able to continue to operate under the EU trade agreements and will either transition to new trade agreements or operate under a “no deal” scenario. In either scenario, it is expected that some level of tariffs will be applied, but until negotiations are concluded, the details of exactly which vehicles will be affected is unknown.

The cost of the tariffs would be applied as an “Importation Charge” and be shown as part of the “On The Road” costs of the vehicle in the pricelist. As negotiations are still on-going, there is uncertainty for the dealer network and our customers, so to allow you to continue to trade confidently until we have clarity on tariffs, COPP will be applied under the conditions laid out below.

Customer Order Price Protection – Criteria:

– All Passenger and Commercial vehicles which are contracted (only when confirmed by a Ford dealer) and not yet UK customs cleared at the point the new pricelists including the Importation Charge are issued, will be price protected against a tariff related surcharge.

-Any Importation Charge would be credited back to the dealer, provided that the vehicle was not re-contracted.

-Includes vehicles which are pre-gate release and those in transit outside the UK.

-To qualify for COPP, vehicles must be registered up to and including 31st March 2021.

Renault – 30th October 2020

Groupe Renault UK has been preparing for many months for all Brexit eventualities. We are confident in our readiness and would like to emphasise our commitment to you.

Our contingency work has been ongoing for several months and is centered on ensuring we are ready in the following key areas, regardless of whether they become necessary on 31stDecember 2020:

• additional customs agents to manage the import of cars and parts.

• streamlined customs accreditations to facilitate in-flow of our goods at the UK border

• changes to processes & I.T. systems to enable the import of cars and parts

• additional local parts stock to cover any additional lead time due to potential port congestion

• maintain timely & accurate payment of goods and services

We have 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, we have increased our capacity and staffing to ensure the timely delivery of vehicles, parts & accessories to our customers.

In order to give you both confidence and clarity, we confirm the following rules for customer orders, both those already placed and for future orders.

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

2. Any order placed from 1st November 2020 onwards, and that is matched to a vehicle imported from 1st January 2021, could be subject to revised pricing based on the imposition of vehicle tariffs. In the event that tariffs apply on import, those will be as per 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.

3. Any vehicle imported from 1st January 2021 could be subject to revised pricing based on the imposition of vehicle tariffs as per 2 above.

4. Any customer order created from 1st January 2021 would be subject to any new pricing irrespective of vehicle importation date.

We will continue to closely monitor events and will keep you informed of any developments.

We hope this gives our customers the confidence to continue to order vehicles and we invite you to speak to your supplying dealer or Groupe Renault Fleet representative if you have any questions.

Mercedes Benz – 26th October 2020

In preparation for the possibility of there being no trade deal agreed as we leave the EU Customs Union and Single Market at the end of 2020, we are writing to confirm our position in terms of vehicle pricing.

Price Protection:

To ensure that our customers are able to continue to purchase cars with confidence and to plan ahead, please be advised that we will guarantee the prices of all Mercedes-Benz and smart cars ordered before 31st October 2020, that have a quoted UK delivery date (on our MBUK ordering system CESAR) prior to 31st December 2020, regardless of its arrival date into the UK.

Pricing Change:

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.

Jaguar Land Rover – 20th October 2020

In response to ongoing Brexit negotiations between UK and EU, I am writing to confirm that Jaguar Land Rover is not in a position to guarantee pricing for vehicles that are registered after 31st December 2020.

All vehicles (regardless of build location) may be subject to a price increase when registered from 1st January 2021.

A further update to this status will be circulated in due course, pending clarity on the details of any future Brexit trading agreement between the UK and EU.

BMW – 7th October 2020

We continue to face political uncertainty regarding the end of the Brexit transition period, whether we will have a free-trade agreement and the implications for your and our businesses.

However, we feel it is important to let you know now 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 1 January 2021, regardless of date ordered, may have additional customs duties imposed on them.

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.

Volkswagen – 17th September 2020

We are closely monitoring developments surrounding the UK’s transitional period, which ends on 31 December 2020. As part of our preparations, we have established an understanding of all Brexit eventualities and we are confident of our readiness. Actions include but are not limited to:

• obtained an EORI number;
• optimised stock availability to mitigate the risk of supply constraints;
• appointed customs agents allowing us to import cars and parts into the UK in line with HMRC regulations;
• implemented and tested required systems changes.

We will issue further communication following the outcome of the EU summit, currently planned for the 15 and 16 October 2020. Should the outcome of the EU summit necessitate 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 remind you of our agreement on pricing – 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.

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