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UK car industry says Brexit rules are denting competitiveness

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UK car industry says Brexit rules are denting competitiveness

Car remains the UK’s No 1 export but volatile energy prices and the cost of complying with EU regulations post-Brexit are blunting the industry’s competitive advantage, the sector’s trade body has said.

Nine in 10 firms in the industry told the Society of Motor Manufacturers and Traders (SMMT) that costs, measured in time and resources, had increased as a result of leaving the EU, with 60% saying the extra expense for trading with the bloc was a “much more significant rise than other export destinations”.

Mike Hawes, the SMMT chief executive, said: “The cost of complying with new regulations has made the UK potentially less competitive compared with some of our European counterparts.

“The first few weeks months were incredibly difficult. There were delays at borders, some of those were teething problems, some of those issues were more substantive. Undoubtedly the industry is facing additional cost and complexity; costs which generally have to be absorbed, to maintain competitiveness.”

The SMMT said that regardless of such issues, the EU would “remain a central trade partner”, with about half of all cars made in Britain exported to EU member states, while almost all vans exported by the UK end up on European roads.

Overall vehicle export revenues to all markets reached £27bn in 2020, even as the Covid pandemic disrupted trade flows and shut down markets around the world.

The UK automotive sector as a whole generated a total trade revenue of £74bn, with more than 80% of British-built cars and more than 60% of light commercial vehicles destined for export.

The SMMT hopes for caps on energy prices in recognition of the importance of the new generation of electric cars to the country’s climate emergency goals.

“Production of batteries, for instance, is a capital-intensive energy industry. It’s also an energy intensive industry. So being regarded as a energy intensive user would potentially allow us to take greater advantage of caps on energy.”

The industry has energy efficiency targets in place through climate change agreements with the Environment Agency that enable some energy discounting.

But Hawes said: “We are still disadvantaged compared with some of our European colleagues.”

Miyuki Takahashi, Nissan’s general manager for government affairs, told an SMMT conference on Tuesday that trading agreements between the UK and EU were “crucial and indispensable to sustain our business”, which includes its Sunderland manufacturing plant employing 6,000 people.

She added: “We want the UK to be our electric vehicle and battery hub … We are looking to localise many components of the battery and EV supply in the UK, to comply with rules of origin and to build up trade for the UK and Japan.”

While the UK is looking to join an Asia-Pacific free trade area, Takahashi said it was unlikely that it would mean more Nissan cars directly exported from the UK. “It’s much cheaper to send it from Japan – and when we think about carbon cycle, the shipment is a big part of the emissions.”

Adrian Hallmark, the chief executive of Bentley, told the conference the Brexit agreement was functioning but had added administration costs and would need constant updating. “We’ve got another six people, it now costs us £6m more and we’ve got an extra warehouse we didn’t need … The trade deal works – but it’s like we’ve got married and have a whole life together. Now let’s get the relationships working.”

He urged government to help “make the UK a safe haven, a go-to place for battery production” as the transition to electric vehicles approaches. Hallmark warned that otherwise rules of origin in the trade deals, which require most of the car’s value to be locally sourced, would need updating for electric vehicles if tariffs were to be avoided, with the cost of batteries up to three times that of Bentley’s traditional engines: “If we don’t find a way of managing the cost of battery and how it distorts the rules of origin, that will cause problems and create tariffs.”

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Business

NBS Says Price Of Kerosene Hit N1, 041 per Litre In October

The National Bureau of Statistics (NBS), has disclosed that the average retail price of Household Kerosene (HHK) paid by consumers in October was N1, 041.05 per litre.

The NBS stated in its “National Household Kerosene Price Watch” for October 2022 that the average price was a 9.90 per cent increase over the N947.30 per litre recorded in September 2022.

“On a year-on-year basis, the average retail price per litre of the product increased by 145.87 per cent from N423.42 recorded in October 2021.”

On state profile analysis, the report showed that the highest average price per litre of kerosene in October 2022 was recorded in Cross River at N1,304.17, followed by Enugu at N1,300.00 and Lagos at N1,294.44.

Conversely, it said the lowest price was recorded in Borno at N783.33, followed by Rivers at N804.17 and Bayelsa at N805.67.

The NBS said that analysis by zone showed that the South-East recorded the highest average retail price per litre of Kerosene at N1,191.14, followed by the South-West at N1,142.60.

It said the North-East recorded the lowest average retail price per litre of kerosene at N905.18.

The report said the average retail price per gallon of kerosene paid by consumers in October 2022 was N3,516.87, indicating an 8.67 per cent increase from N3,236.27 recorded in September 2022.

”On a year-on-year basis, the average price per gallon of kerosene increased by 126.46 per cent from N1,552.96 recorded in October 2021.”

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No Plan To Introduce N5,000 Note- CBN

The Central Bank of Nigeria (CBN) says it has no plan to introduce N5,000 denominated banknote as being speculated by some sections of the society.

Ahmed Umar, the Director, Currency Operations of CBN clarified this at a three-day workshop organised by the Nigeria Deposit Insurance Corporation (NDIC), for members of the Financial Correspondents Association of Nigeria (FICAN) and Business Editors.

The News Agency of Nigeria (NAN) reports that the workshop, which opened on Monday in Port Harcourt, has as its theme: “Building Depositors Confidence Amidst Emerging Issues and Challenges in the Banking Industry.”

Umar who spoke on the topic, “Redesign of the Naira: Benefits to the financial system and the Nigerian economy”, said the apex bank was not carrying out note restructuring.

“We are not introducing any new note because there was noise, some people have seen one N5000 note that we don’t know about,” he said.

Umar was represented by Amina Halidu-Giwa, the Head, of the Policy Development Division, Currency Operations Department of the bank.

He explained that if the apex bank wanted to carry out note restructuring, it would need to coin the lower bills, like the N100 note for example.

He also said that the apex bank had not made any provision for exchange in the redesigned note, adding that what it was printing would only replace the currencies withdrawn.

“What we are printing is going to be very limited because we want other means of settling transactions to be used.

“Because of Nigerians and cash, there seems to be a problem. And it will give us enhanced visibility and control of the currency.

“We will also be able to control the number of banknotes outside,” he said.

The News Agency of Nigeria (NAN) reports that videos of some bundles of new N5,000 notes with the name of the Central Bank of Nigeria clearly printed on them, circulated on WhatsApp immediately after the apex bank announced plans to redesign the N200, N500, and N1,000 notes in October.

(NAN)

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Business

Jaiz Bank Relocates Head Office To Abuja

Jaiz Bank Plc has relocated its Head Office to its own building, Jaiz Bank House, in Garki, Abuja.

A statement by the company on Tuesday said the movement coincides with the 10th anniversary of the bank.

The bank commenced operations in 2012, with three branches in Abuja, Kano and Kaduna.

It currently has 46 branches across Nigeria.

The statement said the new Head Office would provide the bank with more visibility, enlarged space and enhanced capacity to deliver excellent service to its stakeholders.

“The management is thankful to its esteemed customers and shareholders who have continued to support the bank all along and appreciates the hardworking staff for their dedication to duty.

“In the non-interest banking space in Nigeria, Jaiz Bank controls over 62% assets, which is supported by its robust gross income of N23.74 billion as at end of September 2022 from N18.78 billion at the end of September 2021, representing “26.34% increment.”

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