CEO Update

Long-term ambition must not be confused with the short-term need to restart the sector

12 June 2020 #CEO Update

As week two of England’s auto retail restart draws to a close, reports suggest a promising uplift in consumer interest in new cars, although of course it is still too early to tell whether this will translate into meaningful sales volumes over the days, weeks and months ahead. As the picture becomes clearer, the case for measures to help bolster demand will come further into focus.

Much debate has played out in the media about what form such measures, if indeed they are needed, should take. Given the sensitive nature of consumer confidence and how that plays out on purchase intent, we can only hope that this will not become a self-fulfilling prophecy. Only time will tell, but it is clear that any stimulus, if it is to drive sales and manufacturing and help unlock future investment and innovation, must be designed to support the entire market, not just small parts of it associated with longer term ambitions.

Supporting the aftersales sector is also vital as we come out of lockdown, and SMMT has been in regular dialogue with government about lifting the six-month extension for MOTs. While the sector has remained largely operational, the drop in day-to-day work is undermining the viability of many businesses and, with the use of private vehicles now rising, maintaining road safety is paramount. There will be a bow wave of MOT and remedial repair work coming as people bring their vehicles in for their annual check-up. We need the MOT extension lifted to ensure the sector has the capacity to deal with this wave and that it is not exacerbated by continued deferrals.

In some good news this week, SMMT and its Japanese counterpart, the Japan Automobile Manufacturers Association (JAMA), welcomed the start of talks between the British and Japanese governments over a UK-Japan Free Trade Agreement.

For the past 40 years our respective industries have had a deep and mutually beneficial trade, technology and investment relationship, and the conclusion of an FTA would greatly benefit economic prosperity in both countries. Having a deal in place before the end of the transition period will be crucial.

As the automotive industry continues to restart both in the UK and worldwide, SMMT has joined forces with partners, including the Department for International Trade and Santander, to launch a series of webinars to help automotive companies explore global trade opportunities. To find out more about how you could boost your business in markets, including Mexico, Morocco, India and South Korea, sign up here.

Finally, our next webinar tackling the effects of the Covid-19 crisis will take place on Tuesday 16 June at 15:00. We’ll be joined by Brennan Gourdie, Managing Director of Leyland Trucks, and John Keefe, Director of Public Affairs for Getlink, the operator of the Channel Tunnel, who will address the challenges that they have faced during the pandemic. Register for your free place here.