Date: 24.06.2020

Coronavirus threat to car industry

The UK car industry’s trade body says one in six jobs are at risk of redundancy without help from the government in restarting production.

The Society of Motor Manufacturers and Traders (SMMT) says that one in six jobs are at risk, without help from the government including emergency funding, permanent short-time working, business rate holidays, and VAT cuts.

While showrooms are reopening and production lines are restarting, more than 6,000 jobs have already been lost this month.

The SMMT estimates the impact of lockdown will cut annual car and light commercial vehicle production by one-third to 920,000 vehicles this year.

UK car manufacturing came to a halt in April and is down 99.7% against the same month last year.

In Germany, production slumped by 90% in April, but government subsidies on EV and PHEV vehicles have been increased by 50% in an attempt to spur demand.

Across Europe it is estimated that production levels in May were down 70% compared to last year.

Experts fear that a deep economic crisis may keep private buyers from buying and companies from investing, leading to at a decrease of 35% in sales in Europe.

Some UK plants refocused to make 711,495 items of personal protective equipment for health workers.

Metro is lobbying for the automotive sector and adapting systems to provide duty/tax free importing

Recovery depends on efforts to reinstall production processes, under post-Covid precautions, but these are estimated to reduce output by 30-50% per shift.

The loss of 400,000 cars that would normally have been made is expected to cost the British car industry up to £12.5bn in revenues.

In April, there were 830 new car engines made at UK plants, 781 of which were exported. This level was down 99.5% on the year before.

As well as assistance to restart production, the industry is anxious about securing a trade deal with the EU.

Metro, through our trade association and professional institutes, is lobbying government on behalf of the automotive sector to waive tariffs on components. At the same time we are adapting our systems to offer duty and tax suspension support to automotive clients, should tariffs be enforced.

“Certainty that a full, zero-tariff deal will be in place by the end of the transition period will give businesses on both sides chance to prepare, and help drive investment into the new skills, facilities and technologies that will be integral to delivering a zero-carbon future for the UK,” the SMMT said.