What Brexit Could Mean for Fleet Managers
The exact economic implications of Brexit remain unclear, so it is important that fleet operators prepare themselves for any possible repercussions which could evolve over the coming months. Below are some of the problems which fleet managers could soon be faced with.
Increase in fuel bills
Fuel prices have steadily increased since the EU referendum in 2016. The pound is now worth considerably less against the euro and other major currencies since the Brexit vote, and it could fall even further once Britain has left the EU. Retailers have been subjected to significant rises of fuel per litre at the pump and subsequently fleet managers have suffered.
Inflation could affect imports
If general inflation continues to rise, fleet maintenance costs will increase. The cost of imports has already increased, including parts and components. The imposition of trade barriers could also push up fleet maintenance costs. At present, it remains unclear whether trade tariffs on imports will be reintroduced after Brexit, it is all dependent on whether UK and EU negotiators can reach a deal.
Increase in service and repair bills
According to the Society of Motor Manufacturers and Traders (SMMT), fleet maintenance, service and repair bills could rise by as much as 10 per cent if the UK fail to strike a deal with the EU. Fleets are becoming increasingly reliant on high tech parts and devices, some of which have to be imported from overseas. Failure to reach a deal could mean that tariffs are imposed on certain goods.
Vehicles will be more expensive
The SMMT have reported that around £1,500 could be added to the cost of every new car sold in the UK after Brexit. This could be a key overhead for fleet managers and could eat substantially into their budgets. There is strong evidence to suggest that we could also see a substantial price increase for vans and HGVs.
It is a known fact that there is already a shortage of drivers in the fleet industry with the shortfall being made up by recruitment of drivers from other EU countries. Following Brexit, it is expected that movement between the UK and the EU will cease to continue, making it harder for fleet managers to recruit foreign drivers. Furthermore, if drivers become harder to come by, fleet operators may have to pay more to recruit and/or retain the existing drivers they have.
We won’t have a clear idea about what Brexit will mean for the fleet industry until it actually happens, so it is important that fleet managers remain optimistic. Despite the substantial changes predicted, it is not to say they cannot be overcome with sufficient planning. It’s therefore important that in the run up to March, fleet managers familiarise themselves with the above implications so that they are fully prepared for any eventualities ahead.