CEO Update

UK Automotive challenged as never before

20 March 2020 #CEO Update

At this time of unprecedented challenge, securing the health and livelihoods of all society must be the absolute priority. But, Government also recognises it must support the economy and business else society itself will not function.

Automotive is a broad industry, one of the country’s most valuable economic assets and is embedded in communities across the UK. Some 168,000 people are employed directly in manufacturing and 823,000 across the wider sector. However, while the industry is inherently strong and globally competitive, it now stands on the precipice and will urgently need extraordinary measures to avoid falling over the edge.

We recognise the UK government faces an immense challenge as it responds to the escalating crisis. For the automotive sector, that response must provide urgent support for businesses of all sizes and all types – with the need to secure liquidity and safeguard workforces now the most pressing priority.

It is needed now – in days, not weeks. Short-time working and wage subsidies, and deferring payments of tax, including VAT, National Insurance Contributions, PAYE and Business Rates, are actions that government could take overnight which would provide immediate relief.

We welcome the additional and significant emergency support for business announced by the Chancellor this week, and look forward to further measures to be announced later today. However, we cannot emphasise enough the importance of these measures being available to all our sector – given its criticality – and that they operate simply and, above all, quickly.

Meanwhile, this industry and its employees stand ready to support the national effort. Many companies are pursuing seriously the request for support in ventilator production. Others are helping sustain essential deliveries and emergency services by working to keep vans, trucks and private cars on the road.

These vehicles must continue to operate flawlessly and therefore require maintenance and repair, MOT and other support throughout this difficult period. If not, deliveries, whether to businesses or society, especially vulnerable people who now depend even more on home delivery, will not be made. This is sector is very much comprised of key workers.

SMMT is engaged at all levels of government, trying to ensure a comprehensive package of measures to deliver business continuity and support for automotive workers. We are also trying to provide practical advice, support and information to all our members, and will hold a Covid-19 webinar on Tuesday 24 March to provide further guidance on how and where to get help.

For an unknown duration, we face fundamental changes to how we live our lives and operate our business. Manufacturing plants are now closing on a daily bases as social distancing measures take effect and global markets shut down.

Like many other sectors we are in uncharted waters, and like other industries we need substantial government support now – support that should be seen as investment to secure for the future this critical sector. UK Automotive is about to be challenged as never before, but we are in this together and we will rise to that challenge.