The UK-based Society of Motor Manufacturers and Traders (SMMT) has called for British government support in order to protect the UK automotive sector, save jobs and pave the way for a recovery. SMMT stated that the automotive industry needs a support package which will help drive demand and ease cash flow in order to restart.
The UK’s £18.6 billion automotive industry is struggling against the difficulties caused by the coronavirus pandemic. The survey released by the trade group has revealed that a third of automotive workers are still furloughed and one in six jobs in the industry face the risk of redundancy.
In June, the effects of the coronavirus pandemic such as global lockdowns and shuttered plants led to layoffs over 6,000 in the UK automotive industry. In November, there will be more layoffs with the end of the government’s job retention period if the government does not put any support package into effect in order to save these jobs.
The car and light commercial vehicle output volumes are expected to amount to just 920,000 units this year, dropping by a third, SteelOrbis understands.
SMMT said that a sustainable restart for the automotive industry can be accelerated with measures such as “unfettered access to emergency funding, permanent short-time working, VAT cuts and policies that boost consumer confidence”.
The trade group said that a comprehensive zero-tariff free trade agreement with the EU following Brexit has a vital importance for avoiding a £40 billion cut in revenue until 2025, in addition to the £33.5 billion cost of production losses caused by the coronavirus pandemic over this period.
The SMMT report pointed out that UK automotive trade was worth more than £100 billion in 2019 for the third consecutive year and is very significant for supporting Britain’s future growth and prosperity for that reason.