1. News
February 12, 2019

VW Group to pass on costs of no-deal Brexit tariffs to consumers

VW has moved to prepare its dealer network for an increase in pricing to VW, Skoda and Seat cars and finance leases should there be a no-deal Brexit.

In a message to its dealersthe German manufacturer said any WTO or other tariffs associated with a no-deal Brexit would be passed on down through the chain to consumers via an increase in VW, Seat and Skoda car prices after 28th March 2019.

However, the manufacturer said all VW, Seat and Skoda cars ordered on finance and allocated to customers before 7th February would be honoured at existing prices, regardless of tariffs or levies that result from Brexit, meaning it would carry the potential cost of importing a vehicle that was not in the UK ordered by that date.

VW said that any car that was arranged for sale and was in the UK by the 28th March 2019 would also have its price honoured.

VW told brokers if a valid quote had been run (up to 31st January) but not yet converted to an order, it would be honoured at the existing pricing if ordered on or before 7th February.

For Volkswagen finance deals, this would only apply if a quote had been generated on its Volkswagen lease finance system.

In the event of no free trade agreement, VW Finance said it reserved the right to pass on any cost increases as a result of any imposed tariffs charged, but cancellations would be accepted from the dealer network if customers were unhappy with the new cost of their leases.

Motor Finance contacted representatives of VWFS and the parent manufacturer but had received no comment at the time of writing.

In January, Motor Finance reported that German carmakers warned a no-deal Brexit could be ‘fatal’. 

In 2016, Britain was the largest single export market for German manufacturers, who sold 800,000 new cars here. German auto industry association VDA stated: “The consequences of a ‘no deal’ would be fatal. Without an orderly and practical solution for business, jobs in the car industry, particularly on the British side, are on the line.”

Following the vote on a Brexit deal in Parliament which led to a heavy government defeat in January, Sue Robinson, director of the National Franchised Dealers Association which represents franchised car and commercial vehicle retailers in the UK, said: “The UK is the second largest car market in Europe with £35.3bn worth of cars imported from Europe and the retail automotive sector employing 555,000 people directly in the UK. The NFDA urges the Government to take all necessary steps to ensure that our industry is protected. Businesses and consumers need clarity about the Government’s future plans.”