CEO Update

As manufacturers return to work, best-practice guidance can ensure safety

15 May 2020 #CEO Update

With both the UK’s new car market and used car market – which declined -8.3% during Q1 2020, according to the latest figures released by SMMT this week – severely impacted by the lockdown, it is imperative that automotive retailers are allowed to open now to help reboot manufacturing and support the UK’s economic recovery.

Following the announcements at the beginning of the week, and some confusion that resulted, SMMT sought urgent clarification from the government on ‘click and collect’ services for automotive retailers. While it is a welcome development that retailers can now operate contactless ‘click and collect’ services from outside their premises, showrooms must still remain closed. For a number of reasons, this needs to change.

There is clearly pent up demand in the market, and the opening of showrooms will be a crucial step in rebooting not only the wider industry but also in helping to support the UK’s economic recovery. The tax income alone on new car sales represents a major contributor to the Treasury, and with no activity this revenue stream lies dormant. Furthermore, manufacturing plants need an outlet for their products if they are to reopen and ports need to be relieved of some of the stock that has built up during lockdown.

The UK’s automotive retail industry stands ready to reopen safely and, to support this, SMMT and the National Franchised Dealers Association (NFDA) this week published new guidelines specific to the sector. This guidance should help ensure all showrooms are safe spaces for customers and employees alike as we exit lockdown.

Covering the entire customer experience, from booking appointments and, test drives, to part exchanges and aftersales, this best-practice, developed together with dealers and manufacturers, is designed to complement existing government guidance for the UK retail sector as a whole, in order to get consumers and businesses safely back on the move.

As the automotive retail sector restarts, it is equally as important for the manufacturing and aftermarket sectors to ramp up their operations safely. To that effect, SMMT has released further guidelines for both sectors to help to ensure the safety of everyone involved in these critical industries, the latter developed in collaboration with other cross-sector trade bodies.

Some major manufacturers have started to return to work over the past week, albeit at a reduced capacity. This reflects global trends where manufacturing and retail markets are beginning to open. However, with showrooms in the UK still, for the moment, closed, the pace at which operations are able to scale up will remain challenging.

The Coronavirus Job Retention Scheme has provided a lifeline for many in the automotive sector so its extension this week is very welcome, providing longer-term reassurance to manufacturers and workers during this uncertain time. The adjustment to allow part-time working for furloughed staff is particularly good news, answering industry calls for greater flexibility to deliver a safe and successful restart that will support the UK’s overall recovery. The sooner that flexibility is enabled, the better.

Finally, I leave you with the news that this year’s SMMT International Automotive Summit will be held online on Tuesday 23 June 2020 with a condensed and engaging two hour programme. SMMT International Automotive Summit Live will hear from industry leaders including Bentley Motors Chairman and CEO Adrian Hallmark, Volkswagen AG Head of Group Sales, Dr Christian Dahlheim and Financial Times Economic Editor, Chris Giles. Registration is open today and for tickets or sponsorship opportunities, please contact the Events team by email at smmtsummit@smmt.co.uk.