The Fiat logo is seen on a car on display in a car reseller in Milan, Italy, Wednesday, Jan. 27, 2016. Carmaker Fiat Chrysler said Wednesday it would revise its five-year business expansion plan after reporting a 40 percent drop in earnings last year due to a poor performance in Latin America and Asia and flat global sales. ()
European
cars such as Fiats could be about to get more
expensive.


AP
Photo/Antonio Calanni



The price of cars like Fiats and Peugeots could jump by as much
as £1,500 ($1,871) unless a favourable trade deal is worked out
post-Brexit, according to the Society of Motor Manufacturers and
Traders (SMMT).


The Telegraph reports
that SMMT president Gareth Jones made
the prediction at the society’s annual dinner, forecasting a
potential cost to the industry of £4.5 billion.

That breaks down as £2.7 billion on levies on EU cars imported
into Britain and tariffs of £1.8 billion on vehicles going the
other way.

That would work out at an average of £1,500 per car and much of
the cost is likely to be passed on to consumers, leading to sharp
prices rises for continental cars.

Jones said the government must make sure Brexit does not harm the
British car industry, saying: “We operate in an intensely
competitive environment. We need to create the right conditions
for future competitiveness.”

Theresa May convinced Japanese car manufacturer Nissan to keep
and even increase its manufacturing presence in Sunderland, with

speculation she promised to insulate the car manufacturer from
any effects of Brexit.
However,
neither side has disclosed the details of the deal.

If sharp price increases as a result of tariffs do become a
reality, it could devastate sales of European cars in Britain as
cash-strapped Brits stop buying. The Institute for Fiscal Studies
last week predicted
an “extraordinary and dreadful” wage crisis
over the next
decade as the falling pound pushes up prices in Britain and wage
growth slows.