THE IMPACT of coronavirus (COVID-19) has touched businesses and communities all over the world, and its reach did not neglect the UK’s car industry.
Earlier in 2020, dealerships and factories shut during the lockdown and the impact on the automobile industry was clear.
The UK’s new car sales were 44.4% lower in March 2020 than in March 2019, a steeper decline than during the financial crisis of the preceding decade.
The following month, manufacturing was down 99.7% compared with April 2019, the lowest output since World War Two. The losses were worth billions to the UK’s motor trade industry as a whole.
Coronavirus response
However, the industry responded by making every effort to repurpose their facilities for the greater good, with automobile brands transforming their production lines and collaborating with other manufacturers to create critical equipment like ventilators and PPE.
To ease travel for key workers, even in the case of car breakdowns, the likes of Toyota and Lexus provided free roadside assistance for key workers, and NHS workers driving Citroen, DS, Peugeot, or Vauxhall vehicles were permitted to access Groupe PSA’s Roadside Assistance service.
Many businesses offered roadside assistance and extended beyond their usual limits relating to the age of vehicles, mileage or service history.
With carriers being largely unused, companies such as Jaguar Land Rover and Ford UK loaned hundreds of vehicles to support charities, healthcare workers and local authorities to support transport efforts, enabling volunteers to deliver essential supplies to people who are clinically vulnerable or were self-isolating.
Road charging schemes in the UK’s capital were suspended by Transport for London, permitting critical workers such as NHS staff to travel freely without paying a congestion charge.
Taxis were still operating and helping key workers travel to work safely, enabling members of the public without their own vehicles to shop for basic necessities less frequently and avoid public transport, and transporting food and medication to the vulnerable.
At the start of lockdown, fewer cars were driving, with an 83% reduction on major roads reported by the UK’s transport minister, Chris Heaton-Harris.
A six-month extension was made available for car, van or motorcycle MOTs due on or after 30 March 2020, as long as the vehicle was safe to drive.
Reopening of the motor trade industry
The motor trade industry has since been reopening, and although the wheels of the economy are slowly getting back in motion, redundancies are creeping in.
Last month, the stark reality of the impact of coronavirus became clear when the car industry’s trade body, the Society of Motor Manufacturers and Traders (SMMT), revealed one in six UK car industry jobs could be lost.
The financial implications of coronavirus are becoming more apparent, with some motor traders suffering millions of pounds of losses. Acquisitions are looking like a good option, or in some cases, the only option, for some organisations within the motor trade.
When money is tight, some businesses will lean towards cutting corners to save on costs, but don’t be tempted to skip your motor trade insurance. Without the correct traders’ insurance in place, your business risks significant fines, or worse.
Businesses without sufficient insurance could face financial ruin if there is an accident or incident in a showroom, garage or yard and they don’t have the right cover to protect them. As the UK motor trade industry reopens and makes steps towards pre-lockdown levels, it’s not worth the risk.
Signs of recovery
Car sales are showing small signs of progress, particularly in the used car sector, and brands like VW have started offering attractive finance offers to encourage new vehicle sales.
If the UK follows suit with the recovery from Germany, which started re-opening its motor trade sector in April and rapidly bounced back to pre-lockdown levels, there are good signs for the next few months.
Innovative solutions are still required and the ingenuity shown by the motor trade industry during lockdown will now need to be refocused on consumer-facing activities.
Strict social distancing is being maintained across the industry, with the likes of servicing and repair workshops using pre-bookings and contactless vehicle collections.
Retailers have extensive checklists covering the new measures they’ve put in place. While profits are high on the agenda, the safety of both customers and staff is the number one priority.
Leave A Comment