Smart Mobility Exporter Resource Guide | Page 172

united kingdom

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There are no restrictions on the import of passenger cars and parts from the United States. Due to Ukraine's Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union (EU), U.S. exporters will need to meet EU regulations and be certified accordingly.

In 2019, the Verkhovna Rada (parliament) proposed cancelling the excise tax on new automobiles, arguing that high taxes in addition to import duties make even the cheapest car unaffordable for local consumers. However, the fiscal constraints caused by the coronavirus make such a step less likely now.

Customs duties for automotive parts and accessories imported from abroad are ten percent. The value added tax (VAT) for automobiles in Ukraine is 20 percent and is applied to all imports. Also, there is an excise tax based on a car's engine capacity and age, as well as a base tariff. Trade restrictions or other non-tariff barriers (such as quotas) do not exist. Shipping costs to Ukraine from the United States start at $2,400 for basic cars and go up to $5,200 for larger vehicles and premium services. There are additional costs that apply once the car arrives, both for import taxes and registration fees. For temporary stays in the country, vehicles are granted two months in Ukraine before they must be registered with the Ministry of Internal Affairs. Vehicles that are shipped to Ukraine must have been manufactured in the past five years.

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New car and commercial vehicle sales will not return to any version of pre-Coronavirus normality in 2021. The UK automotive sector is under heavy pressure through cash flow, debt, unemployment, and productivity issues. The entire automotive supply chain is running slower or inactive due to social distancing, and a restart to pre-Coronavirus operations will be more complex than shutdown.

One silver lining for the automotive sector in a post-Coronavirus world could come from a recent survey by Ipsos MORI that suggests that the automotive market may not be as depressed as had been feared. The survey showed that one in three consumers in Europe’s top five markets are willing to buy a new vehicle, and the main reason for continued vehicle demand is the safety and protection a personal vehicle can provide, rather than travelling via public transport. Before the pandemic, consumers showed greatest interest in crash prevention (e.g., ADAS, warnings, alerts, etc.) and personal security (connectivity, cybersecurity, etc.) features, enhancing standard crash protection features. Now, consumers want their vehicle also to provide a ‘safe environment’ that is as hygienic as possible and includes: air filtration, antibacterial surfaces and methods to disinfect the interior. This enables the consumer to be in control of the vehicle to make the interior ‘clean and safe.’

The UK Government has a very ambitious Green agenda, and in November 2020 the Government’s Road to Zero strategy set the “ambition” that by 2050 almost every car and van will be zero emission. The Government has brought forward its planned date for ending the sale of petrol and diesel vehicles from 2040 to 2030 and for hybrid vehicles to 2035.

The UK's shift towards electric vehicles has been slower than that of some countries, but with the advent of more advanced technology increasing the range and efficiency of EVs, and with UK government policy pushing a green agenda, the UK has seen a dramatic increase in consumers purchasing EVs. In 2020, Battery Electric vehicles saw a 165% increase over 2019 sales and this trend will most likely continue.

Strong research industry within the UK has allowed the British automotive sector to stay relevant with fast-changing technology. Big manufacturers in the UK, such as Nissan, Jaguar Land Rover and BMW produce EVs at UK facilities. Batteries make up roughly 40 percent of the total cost of a new EV and they will play a pivotal role in the UK automotive sector in the future. While some manufacturers already produce or source batteries produced in the UK, the UK automotive industry must scale up its efforts in order to compete on the global stage. Even though EVs have been available in the UK for decades, the take up on this form of travel combined with autonomous driving technology presents robust business opportunities across a wide variety of technologies that support EVs and autonomous driving solutions.

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Current Market Trends & Demand