Dealer showroom closures costing £61m per day

Published:  22 May, 2020

 While around 40% of garages remained open through the lockdown, with more re-opening as restrictions have eased, the franchised dealer sector has been mostly shut. With the cost of keeping dealerships closed running at £61 million per day according to the SMMT, government is being asked to allow the country’s 4,900 showrooms to reopen.

The annual tax-take including, VAT and VED, on new car sales to private buyers runs up to £5.4 billion. However, lockdown restrictions will have cut this figure by 23% by the end of the month, and each additional day is costing £20 million. In addition, furloughing the retail sector’s 590,000 workers is costing an estimated £41 million a day.

SMMT Chief Executive Mike Hawes said, “Government measures to support the critical automotive industry during the crisis have provided an essential lifeline, and the sector is now ready to return to work to help the UK rebuild. Car showrooms, just like garden centres, are spacious and can accommodate social distancing easily, making them some of the UK’s safest retail premises.

“Allowing dealers to get back to business will help stimulate consumer confidence and unlock recovery of the wider industry, boosting tax revenue and reducing the burden on government spending. Unlike many other retail sectors, car sales act as the engine for manufacturing and reopening showrooms is an easy and relatively safe next step to help get the economy restarted. With every day of closure another day of lost income for the industry and Treasury, we see no reason for delay.”

The SMMT has launched a new 10 reasons to #unlockukauto campaign, which sets out the benefits of allowing UK dealerships to reopen to kick-start the market, which fell by 97.3% in April.  

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