June 28, 2016 at 5:20 PM
The exit of Britain from the EU is a matter that has raised all kinds of debates across the globe. After the referendum vote on 23rd June for Brexit, it is expected that various industries would start to feel the impacts. Van business owners have several concerns when it comes to investing in vehicles while the UK is about to leave the EU in the next two years. There are different scenarios to consider regarding the impact that Brexit will have on the transport business and what options are available. It is not evidently clear, though, and most of these are educated analyses.
As the UK prepares their exit, negotiations need to be made with the EU trading bloc. Goods exportation and importation are some of the frameworks that will have to be considered. One of the advantages that the EU offers is a tariff-free internal market. It is also the largest export market. Britain leaving will have an effect on car manufacturers that have their business in the region. When manufacturers have to pay tariffs, it will eat into their profits. Such manufacturers may consider setting up plants in areas outside the UK. This impact does not only apply to UK manufacturers but also foreign companies with production centres in the UK such as Mercedes and Volkswagen. At the moment, no manufacturer would think of putting in more money for performance improvements or higher quality products for plants based in the UK. Although it is not clear, taxes imposed by the EU may be up to 10%. If this happens, it means that prospective buyers will feel the blowback with European vehicles coming with heavier price tags. A business owner will have to spend more money to invest in a fleet of Mercedes Sprinters or VW transporters.
The other aspect that van business owners have to look at concerning Brexit is the impact on trade. Vans are commercial transport vehicles and the relations of the UK, and the EU will have an effect on how well such companies will be able to conduct their operations. An exit from the single market means that Britain will be responsible for its own trade deals. There is fear that this will bring challenges in the movement of products across different regions. Proponents of Brexit are of the opinion that Britain will have more trade opportunities when it starts operating on its own. It will have the freedom to choose the countries to do trade with. However, there are still fears that the red tape will get worse, consequently influencing the commercial transport business negatively.
It is hard to be certain of how the van business will fair after Brexit until everything is sorted out. The new UK-EU relationship is one of the factors that will have an impact. There are five models the UK can adopt as a way forward after leaving the EU. One of that is the Norwegian-style agreement. With this option, Britain could rejoin the EFTA (European Free Trade Association), which would involve membership into the European Economic Area. What it means is that the UK would still have access to trading partners in Europe. It also means that the UK would have to adhere to standards and regulations of the EU. The UK would, however, not be able to set restrictions on immigrations. Economic experts term the EEA style agreement as the least messy one for exiting the EU. It would also result in less brunt for prospective van buyers and the commercial transport business
The commercial transport business relies on various aspects of the economy to function as it does. It is a tad early to comprehend fully the effects that Brexit will have on the van business sector. The finalised agreement between the UK and the EU will dictate what happens next.