CEO Update

In the face of adversity industry is doing what it does best

27 March 2020 #CEO Update

UK car manufacturing figures released today by SMMT show output declined just -0.8% in February, with some 122,171 vehicles rolling off production lines. This relative stability, equivalent to a loss of just over 1,000 units compared with the same month last year, demonstrates the UK automotive industry’s fundamental strength and competitiveness, despite the myriad global challenges of recent times.

These figures, however, also represent the calm before the storm, coming in the month before the global coronavirus pandemic took hold in the UK. With many global markets closed and our manufacturing plants now effectively on national shutdown, the outlook is of deep concern.

An early assessment commissioned by SMMT of the potential impact of these shutdowns on production volumes suggests a loss of around 200,000 cars by the end of 2020, a fall of 18% to just under 1.1 million. However, the impact could be far more severe if the crisis, and hence the shutdowns, were to be prolonged.

To ensure this critical sector’s voice is heard, SMMT has been engaged with government on a daily, often hourly basis, acting as a conduit for industry concerns and working to get the right support measures in place, quickly. Of course, we wholeheartedly welcome government’s extraordinary package of emergency relief to make sure the industry is in a position to help Britain get back on its feet when the crisis recedes.

However, those measures must work – and work for us – urgently. Getting liquidity into all businesses is essential but the financial packages, such as the CBILS for SMEs and CCFF for large businesses, currently require conditions which many members are reporting as too onerous. This cannot be the Chancellor’s intention and given his comments last night, we look eagerly to the revisions on credit in particular to see whether they will indeed work for our sector. The future of our industry depends on these measures working.

In the face of such adversity, however, the industry is doing what it does best and the entire sector is willing to help the national effort in every possible way, from production of critical medical equipment, to supporting delivery of essential supplies, maintaining emergency service vehicles and providing transport for key workers to support the most vulnerable in our communities. With this in mind it’s also important to remember that many of this industry’s workers are themselves now key workers.

In these deeply unsettling times SMMT is doing all it can to support the industry, with business information available via our dedicated COVID-19 online hub and weekly webinars. Almost 1,000 people joined us this week for our first edition and every Tuesday we, and experts from across government and industry, will be on hand to provide the latest advice and answer questions. Register for our next webinar here. 

In the meantime, stay healthy and rest assured we are making every effort to ensure any support works for the entire automotive industry.

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