Calm before the storm for car production as plants close
Car production fell by 0.8% in February, although the industry accepts this was the “calm before the storm”. The Society of Motor Manufacturers and Traders (SMMT) said the sector was bracing itself for the coronavirus impact, as car plants are effectively on shutdown.
The new analysis suggested the current crisis could wipe around 200,000 cars off the UK’s output in 2020, which urged the Government to accelerate access to emergency support for all businesses. Around 1,000 fewer cars were built last month even though output for the UK market increased by 7.8% compared to February last year. Exports fell by 3.1%, to just under 95,000. UK car production declines -0.8% in February.
A total of 122,171 vehicles rolled off production lines last month, with year-to-date figures showing a 1.5% drop in overall production compared to the same time a year ago. The motor industry was facing an “unprecedented challenge”, with all car manufacturing plants now on shutdown.
An initial assessment commissioned by the SMMT of the potential impact of these shutdowns suggested a loss of around 200,000 units by the end of 2020, a fall of 18%. But the trade group warned the impact could be far more severe if the crisis, and shutdowns, lasted for months instead of weeks.
Mike Hawes SMMT Chief Executive, SMMT
We wholeheartedly welcome Government’s extraordinary package of emergency support for businesses and workers, but this must get through to businesses now.
If we’re to keep this sector alive and in a position to help Britain get back on its feet, we urgently need funding to be released, additional measures to ease pressure on cashflow and clarity on how employment support measures will work.
Des Quinn, national officer of Unite, said: “We need rapid clarification on how long the job retention scheme will apply so that employers can confidently provide continuity of wages for the workforce for the duration of the health and economic crisis. This sector has been a beacon of brilliance for the UK, a symbol of this country as a global manufacturing power. It will do so again but to achieve that the Government must be prepared to pump additional emergency assistance into the sector now. We ask them and the employers to work with us to plan for the time when we can pick this sector up, turn it around and get it contributing to UK manufacturing at the same levels as the last decade.”
A Government spokesman said: “The Government has announced an unprecedented financial package to support business and is committed to doing whatever it takes to get our nation through the impacts of the coronavirus pandemic. This includes the Coronavirus Job Retention Scheme, enabling car makers to retain their staff so they can be up and running quickly when the pandemic ends. We remain in close contact with automotive companies during this time.”
The UK automotive and manufacturing industry is suffering as a result of the coronavirus pandemic. The Government is working hard to soften the impact on the economy, announcing several incentives introduced to support UK businesses at this challenging time. If your business is struggling with cash flow, get in touch for advice from one of our experts.Get in touch