Car industry calls for support as 1 in 6 jobs at risk

The UK automotive industry needs a dedicated restart package to save 1 in 6 jobs and help restart the £18.6 billion sector says the SMMT

Nissan Motor UK Covid-secure car production

Up to 1 in 6 people jobs in the UK automotive industry are at risk of redundancy if a dedicated support package is not forthcoming, the sector’s trade body has warned.

The Society of Motor Manufacturers and Traders has called for cuts in VAT, unfettered access to emergency funding and a permanent part-time furlough scheme.

The organisation also wants policies that would boost consumer confidence – but has stopped short of specifying a new car scrappage scheme.

“UK automotive is fundamentally strong,” said SMMT chief executive Mike Hawes.

“However, the prolonged shutdown has squeezed liquidity and the pressures are becoming more acute.”

A third of the UK automotive industry is still on furlough, said Mr Hawes – “we want those staff coming back to work, not into redundancy”.

The organisation is asking for a government support package similar to that seen in other countries.

In its 2020 Summit held today, the SMMT will reveal that 6,000 automotive jobs have already been lost in June alone.

Brexit is back

UK Automotive Manufacturing Jobs by region

Brexit is another concern for the SMMT. The coronavirus crisis is dominating and “the industry has not the resource, the time nor the clarity to prepare for a further shock of a hard Brexit,” said Mr Hawes.

The organisation wants the government to “turbocharge the negotiations to secure a comprehensive Free Trade Agreement with the EU”.

A no-deal Brexit could see UK new car production falling to 850,000 vehicles a year by 2025 – a low not seen since 1953.

This would cost the economy £40 billion.

In contrast, securing a Free Trade Agreement would boost production back to 1.35 million vehicles by 2025 – taking it back to pre-crisis levels.

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