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, Motor Finance has learned.
In a message to its dealers shared with Motor Finance, the 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.
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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.
(Update 14 March): Subsequently the manufacturer spoke to Car Dealer Magazine on 15th February and confirmed its position, underlining the cancellation policy.
VW then told the BBC: “We are keeping a very close eye on developments and reviewing the entire spectrum of possible effects.
“We are noting with regret that there is currently a stand-still regarding the decision on the negotiated deal. For us, this means a further period of insecurity and planning uncertainty. We continue to prepare for all eventualities.
“Irrespective of this, the United Kingdom will remain an important market for the Volkswagen Group, the second largest in Europe.”
VW luxury marque Porsche said that it had warned customers they may have to pay 10% extra for cars bought in the UK after 29th March.
Potential buyers are being asked to sign a clause agreeing to any potential Brexit/WTO tariff, according to Bloomberg, which followed up Car Dealer Magazine’s story.
Stuttgart-based Porsche said in an emailed statement to the BBC: “As one potential outcome of the Brexit negotiations, there is a possibility that a duty of up to 10% may be applied to cars imported into the UK by us after March 29.
“In light of this, we have chosen to inform customers whose cars are likely to arrive after Brexit occurs to warn them that they may be affected by this tariff – allowing them to be fully informed at the point of sale and, if they wish, to adjust their order accordingly.
“This is a precautionary step in the interests of allowing our customers to plan ahead.”
In January, Motor Finance reported that German carmakers warned a no-deal Brexit could be ‘fatal’.
And on 13th March, the government confirmed that in the event of a no-deal Brexit, a tariff of 10% will be applied to the import of cars from the EU.
The proposed measures would see the price of an average family car increase by £1,500, with car manufacturers set to pass the added costs directly onto the consumers.
This story was updated on 14 March to reflect further developments in the story.