Bodies make EU stance clear
20 June 2016 
The UK servicing industry could see tough times should the UK leave the EU according to the IMI, while the SMMT highlights manufacturer’s desires to remain and Nissan takes legal proceedings against the Leave campaign.
Professor Jim Saker of the School of Business and Economics at Loughborough University has told the IMI that many of the 500,000 jobs and businesses in the sector it represents will potentially be at risk after Brexit. The independent sector already faces challenges from new technology in cars. The risk of losing access to vital information and tooling from big car companies that EU regulations currently provide, could mean a nail in the coffin for many smaller independent garages in Britain.
According to the respected motor industry expert, the main issue comes from the possible loss of the EU Block Exemption Regulations which allow all independent businesses to get the information they need from manufacturers to work on all makes of cars. It also gives them the right to service and maintain new cars without jeopardising their warranty. In the trade it is called the “Right to Repair.”
Professor Saker believes that manufacturers would not share information on new cars if they didn’t have to, making them impossible to maintain by independent garages. Consumers would then have little choice over where to take their business.
Saker comments: ““The manufacturers could potentially hold all the cards going forward. In the absence of the EU Block Exemption Regulation (BER), or something very similar, they could effectively shut the independents out and many of those businesses would ultimately fold. Warranty servicing would be kept within the franchised dealers, competition would be forced out of the market and prices for drivers would inevitably rise.
“It is easy to see that with loss of the EU Block Exemption Regulations, up to half of the independent garages in Britain could go under over the next ten years as new technology and tooling are introduced. This would result in the loss of around 50,000 skilled jobs and with the resulting reduction in competition I would expect to see around a 30% increase in prices,”
Based on Professor Saker’s predictions the IMI estimates that the price increase for servicing alone would be an average of £100 per year for every driver. But there would also be additional cost for repairs and a knock on rise in insurance premiums.
SMMT position is clear
The SMMT wants to ensure there is absolute clarity on the sector’s position given recent misrepresentations in the EU debate (see Nissan story below). The industry is a huge employer, supporting 800,000 jobs across the UK and contributing £15.5 billion annually to the economy. It has emerged from the recession stronger, more productive and more competitive and is now a leading global player, with exports at record levels and vehicle production at the highest level for over a decade.
Mike Hawes, SMMT Chief Executive, comments: “UK Automotive is globally competitive, securing record levels of investment, creating tens of thousands of jobs annually and exporting to over 100 countries. We want this success to continue rather than jeopardise it by increasing costs, making our trading relationships uncertain and creating new barriers to our single biggest and most important market, Europe. Remaining will allow the UK to retain the influence on which the unique and successful UK automotive sector depends.”
The Leave campaign has hit back. Chief Executive Matthew Elliott told the BBC that leaving could help exports. He said: “We know that British car exports are increasingly going to the rest of the world, not the EU. As such, a vote to leave could provide a boost to the industry as we would be free to sign free trade agreements with emerging markets – something we are currently forbidden from doing by the EU.”
He also pointed out that many car company executives had urged Britain to join the euro, adding: “They were wrong then and they are wrong now.”
Nissan to sue Leave campaign
Vehicle Manufacturer Nissan is to take legal action against the Leave campaign for using its logo in a leaflet stating that leading businesses would stay if the country voted out of the EU. The company has suggested it would rather the UK remained in the EU.
However, a spokesperson told the Independent newspaper: “To be clear, Nissan is not supporting any political campaign regarding this most serious of issues. This is a matter for the people of the UK to decide.
“We vigorously protect the Nissan brand and intellectual property in all markets in which we operate. We have repeatedly asked Vote Leave to stop using our name and logo on their materials and to stop misrepresenting our views – a request that has clearly been denied.
“As such, we will be issuing legal proceedings today in the High Court asking for an injunction to stop Vote Leave’s use of Nissan’s name and logo, and to prevent them from making any further false statements and misrepresentations concerning Nissan.”