A leading car industry body has called on the government to help automotive businesses through the coronavirus pandemic. The Society of Motor Manufacturers and Traders (SMMT) said the sector needed funding, help with cashflow issues and clarity on the government’s measures to support employment.
The organisation, which represents the nation’s car makers and dealers, said the industry was “one of the UK’s most valuable economic assets”, contributing around £18.6 billion to the economy every year and employing hundreds of thousands of people. However, as with so many businesses, the SMMT said the UK’s effective lockdown could have a big impact on the sector.
All the UK’s car manufacturing plants are now on shutdown, and the SMMT has commissioned an initial assessment of the potential impact of the lockdown. That suggested UK car manufacturing output would be down by around 200,000 units by the end of 2020, falling to just under 1.1 million – an 18 percent reduction on 2019’s output. However, the organisation warned that the impact could be even greater if the shutdowns were to last for “months instead of weeks”.
The calls come after the industry body announced a relatively strong manufacturing performance in February. Output was down by 0.8 percent on February 2019’s figures, with just under 122,200 new cars rolling off UK production lines.
Of those, around 95,000 were destined for export markets, while the remainder headed for UK customers. Demand in the UK was particularly strong, with the 27,000 cars built for British customers representing an increase of almost eight percent compared with the same month in 2019. However some key foreign markets saw more sluggish demand, and the 3.1-percent cut in exported cars was enough to drop output slightly overall.
Mike Hawes, the SMMT's chief executive, said although February’s figures were quite positive, the outlook for the coming months is bleak.
“Despite the myriad global challenges the UK automotive industry has faced in recent times, it remains fundamentally strong and February’s figures reflect that,” he said. “However, these figures also reflect the calm before the storm. With UK car plants now effectively on national shutdown and many global markets closed, the outlook is of deep concern.
“We wholeheartedly welcome the government’s extraordinary package of emergency support for businesses and workers, but this must get through to businesses now. If we’re to keep this sector alive and in a position to help Britain get back on its feet, we urgently need funding to be released, additional measures to ease pressure on cashflow and clarity on how employment support measures will work.”