During April new car registrations fell by -97.3%, a direct result of showroom closures and consumers staying home during lockdown. Not only is this bad news for the industry, it is also a blow to the Treasury as the cost of keeping dealerships closed amounts to as much as £61 million a day, according to new calculations released this week by SMMT.
The annual tax-take from VAT, VED and other taxes on new car sales to private buyers alone amounts to some £5.4 billion. However, lockdown restrictions will, by the end of the month, have cost the Treasury the equivalent of a quarter (23%) of this amount as lost revenue accounts for around £20 million for every day. Meanwhile, the Coronavirus Job Retention Scheme, which has provided a vital lifeline to many during the crisis, is costing an estimated £41 million a day. The sooner retailers are able to get back into work, the sooner that bill can be slashed.
As with garden centres, dealerships lend themselves more readily to social distancing and retailers have invested to make sure they can welcome back customers and staff safely. Dealers are ready, and allowing them to get back to business will not only help stimulate consumer confidence and drive the recovery of our critical manufacturing sector, but will reduce the pressure on the public purse and support the UK’s wider economic recovery.
So we need retailers open now, which is why today we’ve launched a new 10 reasons to #UnlockUKAuto campaign, calling for the reopening of the UK’s dealer network as a matter of urgency.
In other news this week, SMMT published data on the important HGV and Bus and Coach markets. The new HGV market fell by -22.5% in the first quarter of 2020, with just 9,193 units registered. There was a welcome rise for the bus and coach sector, driven largely by several large orders for minibuses made earlier in the year, however, with lockdown measures holding back growth, there is uncertainty about future demand.
Bus operators are working tirelessly to provide essential transport services and this needs to continue as the nation starts to exit lockdown. To help safeguard the future of this industry, however, we need the funding promised earlier in the year to be made available now, and a clear and comprehensive plan for the sector that boosts operator confidence and encourages fleet renewal.
Finally, registration is live for SMMT International Automotive Summit Live, which will be held online on Tuesday 23 June 2020. Featuring a condensed two hour programme, industry leaders including Adrian Hallmark, Bentley Motors Chairman and CEO, and Dr Christian Dahlheim, Volkswagen AG Head of Group Sales, will be speaking, alongside other influential figureheads. For tickets or sponsorship opportunities, please email the SMMT Events team at email@example.com.