A leading UK car industry body has called on the government to provide “support” to the sector as it attempts to recover from the coronavirus crisis. The call from the Society of Motor Manufacturers and Traders (SMMT), comes as the organisation publishes a report suggesting one in six jobs in the industry is at risk.
In the 2020 Annual Trade Report, the SMMT lays out the effects of the Covid-19 crisis on the automotive sector, revealing that a third (34.2 percent) of the industry’s workers are still furloughed, despite production restarting. With the government’s job retention scheme scheduled to finish at the end of October, the SMMT says the report highlights the “critical need for a dedicated restart support package”.
Other figures from the SMMT show the scale of the problem facing car makers. In April, new car sales were almost completely wiped out, and May was almost as bad. The same was true for new commercial vehicle registrations, and UK production output was slashed as factory gates closed.
In June alone, the SMMT says more than 6,000 UK automotive jobs have already been lost as a result of global lockdowns, so it is asking the government for a helping hand. The organisation has urged the authorities to provide measures such as “unfettered” access to emergency funding, permanent short-time working, business rate holidays and VAT cuts, as well as urging policies that “boost consumer confidence”.
And the organisation that campaigned to remain in the EU during the Brexit referendum has also said the threat of a “bare bones or no-deal” departure from the European Union is also hanging over the sector. The SMMT’s chief executive, Mike Hawes, said a free-trade agreement with the EU would make a “strong recovery” possible for the automotive sector.
“UK Automotive is fundamentally strong,” said Hawes. “However, the prolonged shutdown has squeezed liquidity and the pressures are becoming more acute as expenditure resumes before invoices are paid. A third of our workforce remains furloughed, and we want those staff coming back to work, not into redundancy.
“The government’s intervention has been unprecedented. But the job isn’t done yet. Just as we have seen in other countries, we need a package of support to restart; to build demand, volumes and growth, and keep the UK at the forefront of the global automotive industry to drive long-term investment, innovation and economic growth. Support delivered now is an investment in the future of one of Britain’s most valuable assets… investment that we will repay many times over.
“Covid-19 has consumed every inch of capability and capacity and the industry has not the resource, the time, nor the clarity to prepare for a further shock of a hard Brexit. That’s why we do need to turbocharge the negotiations to secure a comprehensive free trade agreement with the EU that maintains tariff- and quota-free trade... With such a deal, a strong recovery is possible, we can safeguard the industry and our reputation as an attractive destination for foreign investment and a major trade player.”