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Impact of Brexit on the Historic and Classic Motor Vehicles Industry

 

29 Dec 2020

There has been much comment about the impact of Brexit on the UK’s modern motor industry and several parts of the draft treaty deal specifically with the industry.

Less discussed is that the historic motor industry is now a major and increasingly important part of the industry.

Latest data suggests 11.3% of UK Motor Industry jobs are in historic and classic sector

The latest data suggests that 11.3%[1] of all jobs in the UK motor industry are created in the historic and classic sector. As more people take up the use of classic cars and as the modern industry becomes more automated, this proportion will increase.

While the position of the modern automotive industry is now essentially clear and the draft Brexit deal has been welcomed by Mike Hawes, Chief Executive of the SMMT, until now there has been no analysis on the impact for the labour intensive historic and classic vehicles sector. This note has been prepared by Cebr to explain the current position for this sector of the industry in the light of the Brexit deal.

At the launch of the HERO-ERA report[2] on the industry ‘The Economic and Environmental Impact of the Historic and Classic Motor Industry in the UK’ by top consultants Cebr, the potential impact of Brexit was discussed by the panel, Ben Cussons, Chairman, Royal Automobile Club, David Whale, Chairman of the Federation of British Historic Vehicles Clubs, Tomas de Vargas Machuca, HERO-ERA Chairman and Douglas McWilliams, Deputy Chairman Cebr. The discussion highlighted some of the potential problems that might emerge.

These potential problems were broadly in two categories:

1)The status of historic or classic vehicles that might be brought into the UK for repair and renovation. Would these be subject to tariffs either when brought into the UK or when returned to their country of origin. Would there be difficulties in bringing parts for historic vehicles into or out of the UK?

2)Touring with historic and classic vehicles either organised individually or formally in for example a rally. Would there be difficulties in taking such vehicles across borders? Would driving licences be recognised? Would rally organisers have legal status?

 Repaired and remanufactured vehicles

The draft Brexit agreement has considerable content on repaired and remanufactured goods[3]:

A Party shall not apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair.

 Article GOODS.9: Remanufactured goods

1. A Party shall not accord to remanufactured goods of the other Party treatment that is less favourable than that which it accords to equivalent goods in new condition.

2. Article GOODS.10 [Import and export restrictions] applies to import and export prohibitions or restrictions on remanufactured goods. If a Party adopts or maintains import and export prohibitions or restrictions on used goods, it shall not apply those measures to remanufactured goods.

3. A Party may require that remanufactured goods be identified as such for distribution or sale in its territory and that they meet all applicable technical requirements that apply to equivalent goods in new condition.

 Separately on accessories, spare parts and tools[4]:

Article ORIG.11: Accessories, spare parts and tools

 1. Accessories, spare parts, tools and instructional or other information materials shall be regarded as one product with the piece of equipment, machine, apparatus or vehicle in question if they:

(a) are classified and delivered with, but not invoiced separately from, the product; and

(b) are of the types, quantities and value which are customary for that product.

 2. Accessories, spare parts, tools and instructional or other information materials referred to in paragraph 1 shall be disregarded in determining the origin of the product except for the purposes of calculating the value of non-originating materials if a product is subject to a maximum value of non-originating materials as set out in ANNEX ORIG-2 [Product-specific rules of origin].

 On the face of it all this is reassuring. BUT – suppose point 3 of article 9 above is interpreted as saying that a restored car has to meet the technical requirements of a modern car? Whether this happens will depend on the behaviour of individual states? This is still to be considered and affirmed.

Events

For events, as long as they don’t take people into the EU for more than 90 days in a 180 day period, the movement of people is permitted, in the short term without a visa, and UK driving licences will be valid. What may be a problem is insurance since the traditional EU-wide insurance cover will no longer apply automatically to policies issued in the UK.

However, there may be problems for persons from the UK working in the events industry. It is not clear to what extent there will be any provision for UK nationals to work in events organisation in the EU – there does not seem to be any specific exemption from the visa or other rules. There seems to be a likely carnet required for filming which will cost €200. There is a specific reservation that tour guides in France have to be French.

Overall conclusions

It is clear that despite huge progress having been made and incorporated in the Brexit deal, there is a lot that is left unresolved, either for further negotiation at EU level or for bilateral negotiation at the level of individual states.

Tomas de Vargas Machuca, Chairman of HERO-ERA comments:

“As the much quoted Cebr report shows, the historic and classic part of the industry is crucial. It creates 11.3% of the jobs in the general motor industry and this is increasing. Moreover these are craft skilled jobs with a pay premium and in the top 8% for job satisfaction.

 “It is therefore important that when the details are tied up, this sector is not impeded by the Brexit arrangements. It will be crucial for the relevant Departments to contact the leaders of the relevant bodies to ensure that this happens.

 “As the UK’s leading historic vehicle event platform, HERO-ERA organises events that cover the whole world including the EU. These contribute strongly to the relevant local economies as well as providing considerable interest for enthusiasts. It is important that these are not impeded and we will also be willing to contribute to the relevant government departments to ensure this is the case.”

Photos by Will Broadhead

 

Sources from the Economic and Environmental Impact of the Historic and Classic Motor Industry in the UK study

[1] The calculation is based on the Cebr report for HERO-ERA ‘The Economic and Environmental Impact of the Historic and Classic Motor Industry in the UK which showed 92,200 direct and indirect jobs from the sector (including induced jobs the total impact is 113,000)which compares with an estimate of 814,000 direct and indirect jobs from a study by auto industry consultants NES Fircroft 2017 https://www.fircroft.com/blogs/the-automotive-industry-employs-more-people-than-you-think-71462610395

[2] Cebr report for HERO-ERA ‘The Economic and Environmental Impact of the Historic and Classic Motor Industry in the UK  https://www.herostore.eu/historic-motoring-impact-study.html

[3] P21 of the 1246 page text

[4] P 31

For more information:

Tony Jardine Tony@hero-era.com – +447989408736

Doug McWilliams dmcwilliams@cebr.com – +447710083652

A full copy of the Impact Study report is available here, or alternatively a headline news release here

Link to photo selection, please credit photographers in image title:

https://drive.google.com/drive/folders/10UkV0gqZyZrI7r9h0xjzu2fhFtV4G-t2?usp=sharing

 Notes to editors

This is a press release covering the report ‘The Economic and Environmental Impact of the Historic and Classic Motor Industry in the UK’. The 60-page report has been commissioned by HERO-ERA from the economics consultancy Cebr.

The report covers the impact of the Historic and Classic Motor Industry on the economy, jobs, skills, the heritage and the environment. A full embargoed copy of the report is available from Tony Jardine Tony@hero-era.com

HERO-ERA is the world’s leader in historic and classic rallying and runs the epic Peking to Paris Motor Challenge as well as many other leading events. Based at the heart of the UK’s historic motor sector in Bicester Heritage, HERO-ERA is delighted to be sponsoring this crucial report and wish to acknowledge the assistance of many contributions from the industry but in particular; The Royal Automobile Club, The Federation of British Historic Vehicle Clubs, Bicester Heritage and Bicester Motion.

Cebr is one of the world’s leading economics consultancies. Based in London, Cebr specialises in economic impact studies, forecasting and other forms of economic analysis. Douglas McWilliams, Cebr’s founder and Deputy Chairman is a motoring enthusiast who completed the 2019 Peking to Paris Motor Challenge (described in the book ‘Driving the Silk Road’) and was the prime author of the report.

FBHVC – The Federation of British Historic Vehicle Clubs exists to uphold the freedom to use historic vehicles on the road. It does this by representing the interests of owners of such vehicles to politicians, government officials and legislators, both in the UK and (through the Federation Internationale des Vehicules Anciens) in Europe.

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