As Britain prepares to leave the European Union, we survey a range of makers’ pricing strategies in the wake of the split
22 October 2019

After three years of turmoil, Brexit is finally entering its endgame – hopefully. Although Britain’s final relationship with the European Union (EU) is yet to be decided, car manufacturers have started staking out their responses to a variety of different outcomes.

As the most damaging option, firms have naturally focused on ‘no deal’ or an otherwise ‘hard’ Brexit, which could trigger changes to their pricing structures. If Britain leaves the EU without a deal or a sufficient free trade agreement, the UK could find itself subject to significant tariffs, disrupting manufacturers’ supply chains and potentially being passed onto the consumer in higher list prices.

Crucially, this may even apply on cars ordered before the official exit date, as companies seek to protect profit margins in response to rising costs. Not all manufacturers intend to handle this the same way, however, with costs to the company and consumer varying widely between different brands. Here is what those who responded to requests for comment have said:

BMW and Mini: Tariffs not passed on

Find an Autocar car review

Driven this week

BMW and Mini are offering price protection for orders placed on and before 31 October or whatever date Britain leaves the EU. BMW has confirmed that this offer encompasses any tariffs, so even if the UK were leave without a deal, BMW and Mini buyers would be protected from any and all price increases.

Jaguar and Land Rover: Tariffs not passed on

Jaguar has confirmed it will not backdate tariff costs on cars that are registered before 31 December, guaranteeing prices at that date. This is slightly different to guaranteeing prices at the point of order, since registration can be delayed until significantly after the order date. It appears that cars ordered very close to the EU exit date may risk not being protected by the offer, making their buyers vulnerable to extra bills. It's likely that a similar guarantee will be available from Land Rover.

Volkswagen Group (Volkswagen, Volkswagen Commercial Vehicles, AudiSeat and Skoda): Tariffs may be passed on

The Volkswagen Group has confirmed that it will price-protect for customer orders placed before 1 November for all the above brands and vehicles. However, the Group stressed that there are terms and conditions and implied that the guarantee does not cover tariffs. As the Government has yet to announce what the import duty level would be in a no-deal Brexit, the Volkswagen spokesperson could not specify exactly how great the cost to consumers might be, only intimating that the price of cars and parts imported to the UK may increase.

Ford: Tariffs passed on

Ford adopts a similar position to the Volkswagen Group, stating that all prices on orders will be guaranteed, except in the case of tariffs. If tariffs are applied, Ford said these will be passed onto the consumer but emphasised that these would appear as a separate line on customers’ statements and would be limited to the exact cost of the tariffs. Ford of Britain’s managing director, Andy Barratt, has said: “In a no-deal scenario and the imposition of a WTO 10% tariff regime on new vehicles, prices for Ford’s most popular passenger and commercial vehicles would rise by between £1000 and £2000. We will provide more details if or when the situation dictates.” However, British communications executive director John Gardiner cautioned that it will be “impossible to avoid disruption in [the event of a no deal Brexit]”.

PSA Group (PeugeotCitroënDSOpel and Vauxhall): Tariffs passed on

A PSA Group spokesperson has told Autocar that customers who order a car from any of the firm's brands on and before 31 October aren't protected from price increases due to tariffs. If Britain chooses a hard Brexit and tariffs are applied, these will be passed onto the consumer.

Porsche: Tariffs passed on

Porsche has previously warned customers of a 10% increase in prices in a no-deal Brexit. A Porsche spokesperson was unavailable for comment.

Kia: No position confirmed but tariffs likely passed on

Kia’s position regarding tariffs is complicated. Because of a free trade agreement signed several months ago, the company’s vehicles, which are built in South Korea, are protected from tariffs and will therefore pass no extra costs to the consumer. On the other hand, the manufacturer also has a factory in Slovakia, with which Britain does not have a free trade agreement, making tariffs likely in the event of no-deal Brexit. Kia was unable to confirm that tariffs on these models wouldn't be passed onto buyers, stressing that it is too early for it to commit to a strategy.

Mercedes-Benz and Smart: Tariffs may be passed on

Mercedes will guarantee the prices of all Mercedes-Benz and Smart cars ordered before 31 October. However, this doesn't appear to include tariffs. A spokesperson from the company commented: “Should a customs duty tariff become applicable on cars imported into the UK after leaving the EU, we will review our pricing to adapt to the changed circumstances. Please understand that we are not currently able to give any indication as to how that might look.”

The firm is also guaranteeing prices on lease vehicles, according to the leasing site Leasing Options. What this means is unclear, though, the site only saying vaguely that Mercedes will “honour [cars’ pre-Brexit] price[s]”. Further details reveal that customers have to confirm the delivery date and that their order must be booked into Mercedes’ system before the guarantee will apply. Because there may be a time lag between ordering and finalisation, customers who order close to 31 October might not be protected. It also appears that costs could be added in the event of tariffs.

Toyota: No position confirmed

Toyota was tightlipped about its strategy. A spokesperson said that it has no changes to its prices planned in the wake of Brexit; this could mean that tariffs would not be passed onto consumers, but the company didn't explicitly tell Autocar that this is the case.

Nissan: No position confirmed

A spokesperson said that Nissan generally guarantees prices at the point of order but declined to explain whether this included any tariffs that might come into force post-Brexit or to comment on its general Brexit pricing strategy.

Rolls-Royce: No position confirmed

Rolls-Royce said there were no official communications.

Bentley: No position confirmed

Customers ordering Bentleys before 31 October are price-protected. A spokesperson said Bentley anticipates increased costs regardless of the UK's relationship with the EU but added that it will not make a decision on pricing until this is finalised.

Renault: No position confirmed

Autocar has contacted Renault for comment but has yet to receive a response.

READ MORE

EU motor industry leaders unite against ‘no-deal’ Brexit

Vauxhall boss: firm could benefit from a hard Brexit

Jaguar Land Rover boss: settling Brexit will be good for us

Join the debate

Comments
18

22 October 2019

There isn't going to be a no-deal. If there is, it will be 100% the fault of the opposition.

Surely as I understand it, once brexit is confirmed on the 31st (or hopefully before), then there follows after around a month of negotiation whereby all trade agreements with european countries are established. And most likely, they won't be large, since neither side wants that. So will there be a period where we are on WTO terms for a time? 

Basically, someone needs to tell the opposition MPs that the uncertainty is the problem. Delay means even more money lost. Get behind Boris and get Brexit done. 

22 October 2019
JMax18 wrote:

There isn't going to be a no-deal. If there is, it will be 100% the fault of the opposition.

Surely as I understand it, once brexit is confirmed on the 31st (or hopefully before), then there follows after around a month of negotiation whereby all trade agreements with european countries are established. And most likely, they won't be large, since neither side wants that. So will there be a period where we are on WTO terms for a time? 

Basically, someone needs to tell the opposition MPs that the uncertainty is the problem. Delay means even more money lost. Get behind Boris and get Brexit done. 

 

 

Naa you voted for uncertaintly, so uncertainty you deserve... The End!

22 October 2019
JMax18 wrote:

There isn't going to be a no-deal. If there is, it will be 100% the fault of the opposition

<SNIP>

Basically, someone needs to tell the opposition MPs that the uncertainty is the problem. Delay means even more money lost. Get behind Boris and get Brexit done. 

First, don't blame opposition MPs that don't want Boris's crap hard Brexit deal that delivers none of the Leave campaign's promises/fantasies/lies.

Uncertainty is *not* the problem. Tariffs and non-tariff barriers are. Price protections are for in-flight orders. Prices will go up once (if...) the UK leaves and costs go up. No car manufacturer can sensible absorb 10% tariffs.

And - at the risk of going off topic - Boris's deal is *far* from getting Brexit done. It's the mere start, with years of uncertainty is trade deals are discussed and negotiated.  Which will be far inferior to the deals we have now, by the way: the Government's own research shows this.

22 October 2019

Just to put the record straight, i was initially a remainer.

Those of you who think we can just avoid the will of the people and dither and dather for as many years as we like, thanks for voting for Libs etc. And, if you want another refurendum, youre also paving the way for the breakup of the union

And, just to put the record straight, uncertainty is the problem. 

And Boris's is getting brexit done. If it isn't, what is? Its far from perfect, but there is no-one in Parliament today who could have got a better one through. In in any case, there is no new deal. Like it or lump it, its this or no deal. And i think i'd be wrong to assume you want that.

 

22 October 2019
JMax18 wrote:

Just to put the record straight, i was initially a remainer.

Those of you who think we can just avoid the will of the people and dither and dather for as many years as we like, thanks for voting for Libs etc. And, if you want another refurendum, youre also paving the way for the breakup of the union

And, just to put the record straight, uncertainty is the problem. 

And Boris's is getting brexit done. If it isn't, what is? Its far from perfect, but there is no-one in Parliament today who could have got a better one through. In in any case, there is no new deal. Like it or lump it, its this or no deal. And i think i'd be wrong to assume you want that.

 

 

We are on course for a break up of the Union as it stands. NI being hastened towards the exit door and Scotland is furious. It's the prospect of a 2nd referendum that's currently holding the show together.

Those who voted leave in 2016 have a right to feel angry and misled. So do those who voted remain. Nothing is being gained by this constant blame game.

Brexit has poisoned everything. Paying a surcharge on your shiny new motor is nothing really. Certainly not compared to the near certain collapse of U.K. manufacturing.

22 October 2019

Up until now there are no tariffs on JLR products because they are made in the UK. OK, they buy gearboxes from German ZF. Whinging Ford Mo Co, "Brexit will hurt us badly", even though they don't make anything in the UK, will pass on the tariffs!!! It will hurt them particularly badly because their main European market is in the UK, but all their vehicles are made in mainland Europe or Turkey. BMW are more benevolent by not passing on the costs of any tariffs. This could mean that after Brexit BMW's will be cheaper than Ford's or Vauxhalls! 

22 October 2019
jagdavey wrote:

Up until now there are no tariffs on JLR products because they are made in the UK. OK, they buy gearboxes from German ZF. Whinging Ford Mo Co, "Brexit will hurt us badly", even though they don't make anything in the UK, will pass on the tariffs!!! It will hurt them particularly badly because their main European market is in the UK, but all their vehicles are made in mainland Europe or Turkey. BMW are more benevolent by not passing on the costs of any tariffs. This could mean that after Brexit BMW's will be cheaper than Ford's or Vauxhalls! 

You have misunderstood what BMW are saying. They are saying that if you order a car prior to the date we leave, they will honour the price you ordered the car at. After we leave the EU the customer will pay whatever the tariff is. Remember what parliament is arguing about is simply the terms of how we enter the negotiations over our future relationship so the economic uncertainty will continue for between 3 - 5 years with a series of cliff edges so BMW is simply ensuring some market certainty to ensure that they continue to sell cars.

22 October 2019
Just put tariffs on polluting EU cars and encourage people to buy clean Japanese cars by no tariffs. Will help trade negotiations in the future as EU car sales are hit.

22 October 2019
The Apprentice wrote:

Just put tariffs on polluting EU cars and encourage people to buy clean Japanese cars by no tariffs. Will help trade negotiations in the future as EU car sales are hit.

And break WTO rules? And set us up for a trade dispute with a much richer, bigger, more powerful set of countries. Great idea!

If we do any stupid things like that, the EU will simply retaliate. We'll fold, as we are by far the weaker partner.

 

22 October 2019
The Apprentice wrote:

Just put tariffs on polluting EU cars and encourage people to buy clean Japanese cars by no tariffs. Will help trade negotiations in the future as EU car sales are hit.

Just incase anyone is thinking that the UK can do this, the only way we can give preferential tariffs to Japanese cars is to agree a trade deal with Japan. Thats probably 5/10 years away.

Pages

Add your comment

Log in or register to post comments

Find an Autocar car review

Driven this week