With coronavirus lockdown restrictions starting to ease, the UK motor industry is being urged to prepare to re-open as a matter of urgency according to the Society of Motor Manufacturers and Traders (SMMT).
The lockdown, which started on March 23, has seen car dealerships close their doors, along with factories stopping production lines and even major motor sport events being called off.
But car retailers are being urged by the SMMT to prepare to reopen their doors and start trading again, with the daily cost to the Treasury estimated at £61m per day to keep them closed. Plus the annual tax-take that comes from VAT, road tax and other taxes on new car sales to private buyers alone is estimated at £5.4bn.
That figure is a combination of lost income – normally estimated at around £36m, as well as the cost of up to 600,000 employees being furloughed.
According to the SMMT, UK new car registrations declined by 97.3 per cent in April, marking a record low for the new car market. Only 4,321 new cars were registered last month, which is in stark contrast to the 161,064 that were registered the same time the previous year.
SMMT chief Mike Hawes said: “Government measures to support the critical automotive industry during the crisis have provided an essential lifeline, and the sector is now ready to return to work to help the UK rebuild.
“Car showrooms, just like garden centres, are spacious and can accommodate social distancing easily, making them some of the UK’s safest retail premises. Allowing dealers to get back to business will help stimulate consumer confidence and unlock recovery of the wider industry, boosting tax revenue and reducing the burden on government spending.”
Car showrooms are likely to be opened on June 1 as part of the second phase of lockdown restrictions being lifted, though the final decision will be based on whether the infection rate has reduced enough.
The SMMT has launched a 10 reasons #unlockukauto campaign which sets out the benefits of allowing UK dealerships to kick-start the market. These reasons include:
SAFE SPACES – Car showrooms are some of the easier retail premises to accommodate social distancing. They are generally spacious with outdoor areas, and can easily allow measures such as one-way walkways, shielding, and contactless transactions.
RETAILERS ARE READY – Dealers have been preparing to reopen for weeks, with many already offering ‘click and collect’. New cleaning and test-drive processes, appointment systems and showroom layouts will keep customers and staff safe, helping get Britain back on the move.
SUPPORTING JOBS UK – Automotive retail employs 590,000, who together work to drive a sector worth £200 billion. Opening dealerships now will accelerate the market’s recovery, help return the sector to profitability more quickly and reduce the risk of redundancies.
BOOSTING THE ECONOMY – Automotive retail, including aftersales, contributes an annual £36bn to the public purse, and with new car sales to private buyers alone generating £5.4bn in VAT and VED, getting the market re-started to stimulate consumer confidence will give the economy a vital cash injection at this critical time
HELPING PEOPLE BACK TO WORK SAFELY – Government is encouraging people who cannot do their jobs from home to return to work if they can, and, where possible, to travel by private transport if they cannot walk or cycle, to avoid overcrowding on buses and trains. For many, this makes access to a car more important than ever.
REDUCING THE BURDEN ON GOVERNMENT – The Government’s Coronavirus Job Retention Scheme has provided a lifeline to automotive businesses and their employees, safeguarding thousands of livelihoods. However, reopening showrooms will allow many to get back to work, saving the taxpayer up to £41m a day.
CUSTOMER DEMAND – Many people were unable to take delivery of new vehicles or shop around as their finance and lease deals came to an end before lockdown, and re-opening showrooms will allow this demand to be fulfilled. Further, research suggests that many drivers who don’t own a car are now thinking about buying one to help them make essential journeys safely.6
ACCELERATING FLEET RENEWAL – Allowing buyers to return to showrooms will speed up the replacement of older, more polluting vehicles with the latest, cleanest technology. With every new model to market emitting on average 8.3% less CO2 than those they replace, boosting fleet renewal will support a greener recovery for the UK.
SUPPORTING UK MANUFACTURING – Vehicle sales drive manufacturing and reopening markets – including the UK’s – is essential to boost productivity. British car manufacturing delivers £18.6bn to the economy every year, supports 168,000 highly skilled and well-paid jobs across all regions, and, as our biggest exporter of goods, is critical to the UK’s international trade.
TECHNOLOGY AND CHOICE – There are more than 440 car models to choose from in the UK in shapes, sizes and fuel types to suit all driving needs, with almost a quarter (23%) alternatively fuelled. Re-opening showrooms will help people make the switch to these leaner, greener vehicles, while also benefiting from the latest cutting-edge safety and infotainment tech.