The UK car industry’s trade body says one in six jobs are at risk of redundancy if no help has been provided by the government.
The UK’s care industry body Society of Motor Manufacturers and Traders (SMMT) said emergency funding, permanent short-time working, business rate holidays, and VAT cuts are required to stem the flow of job losses.
Showrooms are resuming and production lines are also resuming, it said.
But over 6,000 jobs have been lost in the automotive industry this month.
Similar to many manufacturers, automakers have high fixed costs to pay, such as rent, during a period where sales are significantly down.
And many employees remain furloughed as companies work out how to operate while enabling for social distancing.
“A third of our workforce remains furloughed, and we want those staff coming back to work, not into redundancy,” stated Mike Hawes, CEO of SMMT.
“Government’s intervention has been unprecedented,” he said. “But the job isn’t done yet. Just as we have seen in other countries, we require a package of support to restart; to build demand, volumes, and growth, and keep the UK at the forefront of the worldwide automotive industry.”
The lobby group estimates the impact of coronavirus led lockdown will cut annual car and light commercial vehicle production by one-third to 920,000 vehicles in 2020.
Together with assistance to resume production, the industry is worried about securing a trade deal with the EU.
Hawes informed the BBC’s Today program that the auto manufacturers in the country could not afford to pay import tariffs on components coming to the UK from abroad, as the cost would be much more than their profit margin.
“It is essentially important that the government achieves its ambition, which is a trade agreement before the end of the year,” he said.
The UK departed from the EU on 31 January but continues to be in the single market and customs union until 31 December, while the two sides attempt to hammer out a trade agreement.
“Certainty that a full, zero-tariff deal will be in place by the end of the transition period will give businesses on both sides chance to prepare, and help drive investment into the new skills, facilities, and technologies that will be integral to delivering a zero-carbon future for the UK,” the lobby group stated.
British auto manufacturing came to a clear halt in April, dropping 99.7% against the same month in 2019.
It was the lowest output since World War II. Only 197 premium and luxury sports vehicles rolled off factory lines, with 45 of those sent to UK consumers.
Some plants refocused to build 711,495 items of personal protective equipment (PPE) for health workers due to the coronavirus crisis.
The loss of 400,000 cars that would generally have been made is expected to cost the British auto industry up to £12.5 billion ($15.65 billion) in revenues.
In April, there were 830 new car engines made in the plants of the country, 781 of which were exported. This level dropped by 99.5% compared to the year before.
