Brexit Brings Fewer Choices and Higher Costs for New Car Buyers, Report Says

Impact of the Windsor Framework on Car Sales in Northern Ireland

New models from well-known car manufacturers like Vauxhall, Renault, Citroen, Peugeot, and Jaguar Land Rover may not be available for sale in Northern Ireland due to the Windsor Framework. This is a concern raised by the National Franchised Dealership Association (NFDA), which represents car dealerships. The organization has expressed that the industry is facing a "generational challenge" caused by post-Brexit trading rules. These rules are expected to increase costs and reduce consumer choice.

Starting from 1 January, new cars registered in Northern Ireland must have an "EU type" approval, while vehicles sold in the rest of the UK will require a "GB type" approval. However, some major manufacturers are only choosing the GB certification for their new models. As a result, these models cannot be registered as new cars in Northern Ireland unless the rules change.

The Windsor Framework was designed to ease trade between Northern Ireland and Great Britain after Brexit. It also aimed to maintain the integrity of the EU's single market. Under this arrangement, Northern Ireland remains part of the EU's single market for goods, which means the EU has an interest in ensuring that products sold there meet its standards.

While these rules have provided businesses with more certainty regarding trade, they have also faced significant criticism. According to Alastair Peoples, a spokesperson for the NFDA, the changes will lead to "less choice for anyone in Northern Ireland" compared to consumers in the rest of the UK. He also highlighted that prices for vehicles that do make it to Northern Ireland will be higher.

Rising Costs and Declining Sales

The NFDA mentioned that the local market is already experiencing strain. While new car sales are increasing in Great Britain, dealerships in Northern Ireland are witnessing a noticeable decline. The motor industry in Northern Ireland contributes approximately £3 billion annually and employs around 17,500 people.

The challenges come at a time when dealerships across the UK are preparing for the potential impact of the chancellor's rumored cuts to the Motability Scheme. This could negatively affect new car sales.

Stormont’s Economy Committee has requested that Northern Ireland’s Secretary of State, Hilary Benn, urgently address the issue. Speaking at the finance committee on Wednesday, Mr. Peoples emphasized that the serious and detrimental issues previously highlighted are now having a critical effect. He warned that dealers are seriously considering job losses as they plan for next year.

Customers in Northern Ireland are currently experiencing reduced choices in new vehicles, with certain models no longer available locally. They are also facing higher costs compared to those in Great Britain.

A Widening Gap

Jeff McCartney from Charles Hurst used Vauxhall as an example to illustrate how a major player in the market is faring under the post-Brexit arrangements. He noted that in the UK, Vauxhall's retail sales are up 16% year to date, while in Northern Ireland, they are down 59%. This gap is growing as the year progresses.