The Society for Motor Manufacturers and Traders (SMMT) has published a statement expressing its disappointment at the lack of government support for the automotive sector in the ‘mini budget’ announced this week.
Mikes Hawes, chief executive of the SMMT, noted that the automotive industry has been hit particularly hard by the coronavirus crisis, with thousands of workers already losing their jobs and many more at risk.
“We urgently need government to expand its strategy and introduce sector-specific measures, including those that SMMT has been calling for repeatedly over the last three months. Action to improve cashflow such as business rate holidays and tax cuts is now crucial.
“The industry is already facing its biggest challenge in living memory and until critical industries such as automotive recover, the UK’s economic recovery will be stuck in low gear. The scale of this challenge was highlighted this week with the release of the UK’s new car registration figures for June.”
The UK stands alone as the only country of Europe’s five largest economies not to provide dedicated support for its automotive industry – a situation that will only deter future investment, said Hawes.
The latest figures revealed a 34.9% year-on-year decline in new car registrations, with 78,044 fewer cars registered than in June 2019. There is also a fear that the level of pent-up demand may not be as high as first hoped, as many of the newly-registered vehicles were those ordered pe-lockdown.
“Year to date registrations are now down 48.5%, representing the lowest level since 1971 and resulting in an estimated £1.1bn to the Treasury in VAT receipts alone,” said Hawes. “This is clear evidence as to why we need policies to provide broader support for consumer confidence to boost big-ticket spending, which in turn will help drive manufacturing.”