UK automotive assesses ongoing Coronavirus impact

Published:  20 March, 2020

The UK automotive sector continues to monitor the potential for disruption, as the Coronavirus outbreak continues.

With schools closing nationwide from today, garage businesses across the UK will be balancing the need for staff to take care of children, while also dealing with those who are unwell.

Other concerns remain however. As early as mid-March, the BBC reported that UK ports were experiencing gaps in their schedules, with large container ships from China and the far east not turning up as expected.  With 40% of goods coming into the UK arrive by air, the almost total shutdown of European air travel will have an impact on the supply of parts as well.

Looking at the availability of parts at the factor end, A spokesperson for Euro Car Parts, said: “To date, we’ve not experienced any issues with stock availability because of the Coronavirus outbreak. We’re aware of the risk of disruption it still poses, and our supply chain team is working on contingency plans and is in regular dialogue with our suppliers to ensure we’re prepared to mitigate against any potential impact.” 

 In his first budget, just a few weeks after getting the role of Chancellor of the Exchequer, Rishi Sunak announced a £30bn coronavirus support package. This was superseded by a £350 billion stimulus package, made up of £330bn available for business loans and £20bn in other aid. Commenting on the Chancellor’s measures, SMMT Chief Executive Mike Hawes said: “We now seek immediate dialogue with government to agree how such a comprehensive package of measures can ensure business continuity and support for workers. The continued success of this industry is critical not just to the country’s economic performance but also to the hundreds of thousands of people across the country who rely on the sector for their livelihoods.” Meanwhile, the IAAF has written to departments across government, urging for more help for the entire automotive aftermarket supply chain.

In the letter to Chancellor of the Exchequer Rishi Sunak, Wendy Williamson, IAAF chief executive, said: “We have many companies and individuals who are facing significant challenges and there is more need than ever to keep drivers on the road so that infrastructure can remain as stable as possible.”

IAAF has suggested a range of measures, including support for those working reduced hours or not working, support for temporary lay-offs and statutory sick pay relief. The IAAF also urged government to extend business rate relief and the Coronavirus Business Interruption Loan Scheme to all businesses, and asked it to offer scope to include delaying payment for VAT, National Insurance Contributions and PAYE.

With the government indicating further measures could be enacted, in a letter to Secretary of State for Business, Enterprise and Industrial Strategy Alok Sharma, the NFDA urged support for the automotive aftermarket: “During periods of isolation and lockdown, millions of people will rely on access to safe vehicles to check on vulnerable relatives and deliver essential items,” said NFDA Director Sue Robinson.  “It is essential that these vehicles are kept in a safe and roadworthy condition through essential maintenance and repairs, as well as MOT inspections.”

While this is going on, garages could see a spike in new customers with older cars. Used car website DesperateSeller.co.uk has also reported a sudden 18% spike in searches for cars priced under £2,000 in the week from 12 March, when the coronavirus crisis escalated. The most in-demand models are small cars such as the Ford Fiesta, Vauxhall Corsa and VW Polo.

Rod Joseph, director at DesperateSeller.co.uk, said: “People are veering away from public transport in order to better isolate themselves but they also want to support elderly relatives even more than before. Suddenly, getting a cheap runabout with a good reputation for reliability  makes a lot of sense. It looks like budget cars could be the motoring equivalent of handwash and dealers will certainly welcome the increase in demand. The circumstances in London mean it is a particular hotspot.”

Advice is being made available across industry. The IGA has issued advice to its members, pointing them towards the latest updates being made available via the government and other organisations including ACAS, while the GEA has also made advice available.

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