LONDON, June 21, 2016 /PRNewswire/ --
The cost of car servicing and repairs could rise by 30%, and up to 40,000 independent businesses could go bust if Britain votes to leave the EU, a leading academic has advised the IMI.
Professor Jim Saker of Loughborough University has told the IMI that 500,000 jobs and businesses in the sector it represents will potentially be at risk after Brexit. The risk of losing access to vital information from manufacturers that EU regulations currently provide, could mean a nail in the coffin for many smaller independent garages in Britain.
The main issue comes from the possible loss of the EU Block Exemption Regulations which allow all independent businesses to get the information they need from manufacturers to work on all makes of cars. It also gives them the right to service and maintain new cars without jeopardising their warranty.
Professor Saker believes that manufacturers would not share information on new cars if they didn't have to, making them impossible to maintain by independent garages.
Professor Jim Saker said, "In the absence of the EU BER, they could shut the independents out and many of those businesses would fold. Warranty servicing would be kept within the franchised dealers, competition would be forced out of the market and prices would rise. Without Government intervention the UK could simply revert to the situation prior to BER with franchised dealer market areas and diminished competition. The situation is worse now as the majority of new cars are accessed via PCPs which tie the customer into the manufacturer networks.
"It is easy to see that with loss of the EU BER, up to half of the independent garages in Britain could go under over the next ten years as new technology is introduced. This would result in the loss of 50,000 skilled jobs and with the resulting reduction in competition I would expect to see a 30% increase in prices."
IMI CEO Steve Nash said, "The advice we have received from Professor Saker gives us and our member's grounds for concern. We have a duty to pass this analysis on to the 500,000 people who work in the retail motor industry ahead of the referendum.
"This warrants a response from the Leave campaign to explain how they would mitigate against what looks like a Doomsday scenario for businesses and a raw deal for millions of drivers."
Notes to Editors
SOURCE Institute of the Motor Industry (IMI)