Ford re-opens dealerships

In terms of its contribution to the UK economy, the wholesale, retail, maintenance and repair elements of the automotive industry are worth around £36 billion a year (SMMT figure) and could serve as a kick-starter for the wider economy. Ford’s dealer network accommodates roughly 1.2 million customer visits in a “normal” year – many of these will now be carried out virtually but the dealerships and showrooms are now open for business.

Ready for customers visiting from Monday, dealers will also adopt an eight-step “care code” which includes the reconfiguration of showroom layouts to enable social distancing, providing hand sanitiser on entry, conducting no-touch vehicle demonstrations and payment methods and facilitating unaccompanied test drives for customers.

Employees will also be required to carry out health tests before leaving home each day, with reusable thermometers and sanitiser care kits issued by Ford. Face masks will be worn at all times and thorough deep cleans will be conducted on a daily basis.

Ford has continued to conduct permitted dealer activities throughout lockdown, such as services and repairs of essential vehicles. Moreover, all of Ford’s European plants are now back at work, including the Dagenham and Bridgend Engine Plants since 18th May.

10 reasons to #UnlockUKAuto

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 £5.4bn. 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 £20m for every day. Meanwhile, the Coronavirus Job Retention Scheme, which has provided a vital lifeline to many during the crisis, is costing an estimated £41m 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 smmtsummit@smmt.co.uk.

Automotive manufacturing sector ready to ramp up production

The UK automotive manufacturing sector today announced its preparedness to get production lines rolling again, with the publication of new sector-specific guidance by the Society of Motor Manufacturers and Traders (SMMT). The best-practice advice will help to ensure all automotive production sites are safe spaces for workers, controlling the risk of transmission.

The new guidance covers the complete automotive manufacturing environment, including workstations, staff entrances, car parks, shared offices, meeting rooms and communal areas. Wide ranging advice is available encompassing everything from social distancing and hygiene standards to personal protective equipment (PPE), mental health and staff communications.

Developed together with vehicle and supply chain manufacturers it is designed to complement government guidance for the overall UK manufacturing sector and help automotive manufacturers, from SMEs to large enterprise, implement legal requirements as part of individual risk assessments in line with their unique business operations.

Although manufacturing has been permitted to continue throughout the lockdown period, the closure of markets in the UK and globally, meant that the vast majority of plants were forced to halt operations. As markets start to re-open, production lines are gradually beginning to roll again, although at a much slower pace as manufacturers enforce strict safety measures to ensure workers are protected, and market demand remains subdued.

Mike Hawes, SMMT chief executive, said,

The coronavirus crisis has taken a heavy toll on the automotive industry but, as lockdown measures begin to ease, at last there is some light at the end of the tunnel. Global markets are starting to open up and overseas demand for UK-built vehicles, engines and components will follow. However, to accelerate this crucial sector’s recovery we need all parts of the jigsaw to be in place, starting with the reopening of automotive showrooms to drive essential market demand.

Automotive is the UK’s single biggest exporter of goods, trading with some 150 countries worldwide, and accounting for more than 14% of total exports. The sector is one of the country’s most valuable economic assets, directly employing 168,000 people, supporting communities in every region and delivering an annual £18.6bn to the public purse

As records tumble we need to focus on the future

Figures published by SMMT this week showed that the UK new car market fell by -97.3% in April, the worst performance since just after WW2 when rationing was still in effect and the country was in the process of rebuilding itself. Whilst these figures are extremely concerning, they are hardly surprising, given that showrooms were closed for the entire month and car buyers left housebound.

There were 4,321 new cars registered in total, which is some 156,743 fewer than in April 2019. A glimmer of good news was that many of these new cars were delivered to key workers as well as front line public services and companies, reaffirming the sector’s importance in the national fight against coronavirus.

More worrying is SMMT’s latest new car market forecast for 2020 which has seen a downgrade on previous expectations to just 1.68 million registrations. This would represent the worst year of new car sales since 1992 and below the levels recorded during the 2008 financial crisis.

A strong new car market supports a healthy economy and, as Britain starts to plan for its recovery, we need to be in the vanguard. Hundreds of thousands of people’s livelihoods are dependent on the automotive industry and, as manufacturing begins to resume, the call for a safe return to work for retailers grows stronger. Getting the market moving again will not be easy and some form of stimulus may be required to encourage consumers back into showrooms. But safely restarting this most critical sector and revitalising what will, inevitably, be subdued demand will be key to unlocking manufacturing and accelerating the UK’s economic regeneration.

SMMT is firmly engaged across government departments to get this message across and also on how to create safe working conditions to enable companies to get back to work. At the same time, we are continuing to work with members and other stakeholders to produce specific industry guidance and best practice covering automotive manufacturing, retail and aftermarket.

Vital compliance checks for business owners coming out of lockdown.

Businesses will soon be planning to reopen and get their employees back to work after the government announces the new workplace rules later this week.

These rules are likely to include social distancing, wearing of personal protective equipment, and the possibility of staggering work times.

One area of importance is how private and company vehicles are going to be used by employees and contractors. Many people have not driven their vehicles for several weeks, which highlights extended risks for both employees and company directors.

In Wuhan China, it has been reported there has been a 32% increase in the use of private cars from public transport, because personal vehicles were seen to be safer.

There are some vital checks which should be carried out by business owners and drivers as we prepare to come out of lockdown.

Vehicles have now been parked up in workplaces and outside people’s homes throughout lockdown and we should all take time to review our current procedures on vehicle and driver checks to stay within the law and make sure that employees are safely put back on the roads. This include vehicle checks for defects and roadworthiness and driver checks on health & wellbeing as well as licensing.

It’s important to remember this doesn’t just concern employees with company owned vehicles but also the ‘grey fleet’ drivers who are the employees that use their own vehicles whilst on company business, an area which is still miss understood by many. In a recent’ Driving for Better Business’ survey, 60% of senior executives said they ‘didn’t know about the grey fleet’ or ‘how big it was’ in their business.

Health & Safety Laws require that all employers show the same ‘duty of care’ to employees driving their own private vehicles as they do for company-owned, leased or hired vehicles. Employers have a legal obligation to ensure all vehicles used for work purposes, irrespective of who owns them are safe and properly maintained and that drivers are licensed and insured.

Rebecca Hall managing director of HH Driveright commented, “We all have a duty of care to make sure that we put safety first for anyone driving any type of vehicle whilst on company time, including both employees and contractors. Having the correct processes in place for checking and reporting is very important. You wouldn’t put people at risk asking them to drive 5 or even 100 miles to see a customer without checking first that are fit to drive, their vehicle is in roadworthy condition without any defects and they have the correct licence and insurance in place. With the current lockdown being in place since March 23rd, its even more important to get on top of processes for people returning to the new normal.”

At Fleet Live in October 2019, we learned that only 38% of directors regularly check their drivers have the correct insurance and 50% of all vehicles on UK roads are used for business purposes.

• Think about your own organisation, have you got a way to keep track of the vehicles used by employees or contractors? You should keep as a minimum:
• Insurance details including business cover for those employees using their own vehicles for work related journeys other than just commuting
• Vehicle maintenance checks such as oil and brake fluid levels
• Roadworthiness including defects, windscreens, tyres etc

Road tax validity
Checking drivers every day will reduce the risks of incidents taking place. Make sure that every driver is fit to drive and put in place a way to monitor individual driving behaviours, which can result in further education or wellbeing support. These checks should include:

• Licence validity
• Age and the drivers experience
• Health issues and alcohol or drug use
• Driver behaviours such as speeding, harsh braking and using a mobile phone

Keeping a track on your drivers and vehicles requires responsibility and accountability. Checks can be completed and recorded on manual systems such as using spreadsheets, but as your fleet and drivers increase it would make sense to look at a more efficient method which could be the introduction of a tech system such as the HH Driveright service.

Record -97.3% fall for UK new car market in April

UK new car registrations declined -97.3% in April, according to figures published today by the Society of Motor Manufacturers and Traders (SMMT). This marked a record low for the new car market as the coronavirus pandemic forced the nation into lockdown for the entire month, with showrooms closed and car buyers housebound.

Just 4,321 new cars were registered in the month, some 156,743 fewer than in April 2019, with many delivered to key workers and front line public services and companies. The decline was the steepest of modern times, and is in line with similar falls across Europe, with France -88.8% down and the Italian market falling -97.5% in April.

Fleet orders represented by far the bulk of the market, taking 71.5% market share, equivalent to 3,090 units, while private buyers registered just 871 cars – a year on year fall of –98.7%. The distortion was reflected across all segments and fuel types, with the numbers of new petrol and diesel cars joining UK roads down -98.5% and -97.6% respectively, as plug-in hybrid vehicles (PHEVs) declined -95.1% and hybrids (HEVs) -99.3%. Meanwhile, the niche battery electric vehicles sector saw a smaller percentage decrease of -9.7%, as some pre-ordered deliveries of the latest premium models were able to be fulfilled.

Despite showrooms being closed for the month of April, companies managed to support key workers, critical companies and frontline services. Meanwhile, the industry has continued to keep service and repair workshops open to maintain vehicles that are so crucial in keeping key services, goods and people moving safely across the country.

The news comes as SMMT releases its latest new car market forecast for 2020, downgrading previous expectations to just 1.68 million registrations. This puts the sector on course to record its worst performance since 1992’s 1.59 million units, below the levels seen during the financial crisis and some -27% lower than the 2.31 million new cars registered in 2019. Despite this, the BEV market is expected to double in 2020 to 77,300 units as new model introductions bolster the market.

Mike Hawes, SMMT chief executive, said, “With the UK’s showrooms closed for the whole of April, the market’s worst performance in living memory is hardly surprising. These figures, however, still make for exceptionally grim reading, not least for the hundreds of thousands of people whose livelihoods depend on the sector. A strong new car market supports a healthy economy and as Britain starts to plan for recovery, we need car retail to be in the vanguard. Safely restarting this most critical sector and revitalising what will, inevitably, be subdued demand will be key to unlocking manufacturing and accelerating the UK’s economic regeneration.”

SMMT Update – Time to accelerate industry’s restart

This week, SMMT released UK automotive production figures for March which highlight the extreme test the sector is facing. Amid coronavirus-led UK plant shutdowns, car manufacturing fell by -36.7% in March, with just 78,767 vehicles being produced, with similar declines for commercial vehicle and engine output.

These figures are of great concern and while government’s emergency measures are helping, liquidity remains a major worry and will become even more stretched as the industry begins to restart operations. Independent analysis for SMMT, also released this week, points to a potential industry cost of £8.2bn if UK plants stay closed until mid-May. However, if subsequent demand is weak and the speed at which production lines are able to ramp up is constrained, this hit could be even worse, so industry needs government support and coordination to implement a clear restart plan for all, including the re-opening of retailers in the first phase of easing the lockdown.

This was a point made in a letter SMMT delivered to the chancellor and the secretary of state for business, environment and industrial strategy, last week, outlining the need for collaboration and a clear and concise restart plan. This proposes four pillars: ramping up safe and sustainable production, securing and supporting resilient supply chains, re-opening automotive retail and stimulating demand, and ensuring a supportive regulatory framework is in place.

The importance of a restart package was underscored this week in a newly published cross-industry survey that found two thirds of the workforce currently furloughed, with revenues severely hit. Our package approach will help unlock the full potential of the UK automotive production system – from retail, through supply chains to vehicle engineering and manufacture – and support an industry that provides more than 820,000 jobs across the UK.

SMMT also welcomes news from government that anyone who needs to travel to their workplace, but is displaying symptoms of coronavirus, will now be eligible for testing; a move which should give comfort to workers and help speed up the restart of the industry. Manufacturing workers are included within this testing expansion. Additional guidance such as government endorsement of safe-working protocols for automotive manufacturing and retail – both of which SMMT is developing – and more flexible funding to support short-time working would also be needed and SMMT continues to raise these issues with ministers.

Our next coronavirus webinar will take place on Tuesday 5 May at 15:00 – 16:00, and will explore how the industry can get back to business. Alongside representatives from SMMT, Squire Patton Boggs will be on hand to offer practical advice to the automotive sector. You can register, and also find all of the latest government support, business advice and guidance, by visiting our online COVID-19 hub.