CEO Update

Government greenlights auto retail restart as manufacturing output falls

29 May 2020 #CEO Update

The latest production figures, released today by SMMT, highlight just how devastating coronavirus has been for the UK automotive sector. Over the course of April, car manufacturing plummeted by -99.7%, with just 197 units made, the lowest level seen since World War Two. All of the cars that left factory gates in the month were premium, luxury or sports cars that were assembled prior to shutdowns with only finishing touches needed. There were also similar declines for commercial vehicle and engine output, which fell by -99.3% and -99.5% respectively during the month.

Instead, many manufacturers turned their attention to personal protective equipment (PPE) production, contributing 711,495 pieces of PPE to the national effort, with others helping to make medical equipment, an impressive achievement in light of the circumstances.

As manufacturers begin to restart production lines, the latest independent analysis suggests that the UK’s annual car production could fall below one million units in 2020, a worryingly far cry from the two million we were targeting only a few years ago.

In the face of so much uncertainty, it was welcome, if not overdue news this week, that the government confirmed its plans to allow dealerships to reopen on 1 June, listening to our #unlockUKauto campaign. This is a welcome, sensible and safe next step to unlocking the wider sector, helping drive manufacturing as well as retail.

But more still needs to be done to help reboot the sector. Many companies are still dependent on the Government’s furlough scheme, CJRS, and restarting operations will not be smooth. Social distancing means many facilities will return only gradually as it will be some time until they can operate at full capacity. Increased flexibilities in the CJRS – which SMMT has also sought from Government – and increased access to finance will remain key in getting the sector restarted and Britain back to business.

Finally, the next Covid-19 webinar, to be held on Tuesday 2 June at 15:00-16:00, will feature SMMT representatives alongside Andy Hamilton, CEO of Euro Car Parts, who will discuss how the company has kept complicated warehouse and logistics operations going through Covid-19 to ensure vehicles can keep moving safely. You can sign up here.