Five ways to rev up the car market – Telegraph.co.uk


Coronavirus is expected to deal a heavy blow to car sales in the UK this year. 

Just six months ago the Society of Motor Manufacturers and Traders predicted that 2.25m new cars would be registered in 2020, a small drop on the 2.31m of the previous year as worries about Brexit and wider economic uncertainty weighed.

Covid-19 changed all that and prompted the trade body to slashed its forecast to just 1.68m new car registrations this year – the lowest level since 1992.

That’s a figure even insiders concede is conservative and it’s easy to see why. With showrooms closed last for all of April, a paltry 4,321 cars were registered – down 97.3pc on the same month a year ago.

Online sales and easing of lockdown restrictions mean May’s figures released on Thursday are likely to be a little better, but the expected 85pc plunge will just highlight how desperate a situation the industry is in.

Britain’s automotive sector is a key part of the economy, supporting almost a million jobs and some regions such as the West Midlands heavily dependent on it.

Almost 170,000 people are employed directly in making vehicles and 823,000 across the wider automotive industry, with the £82bn a year turnover sector accounting for 30 manufacturers large and small that are serviced by 2,500 companies producing components for them. 

With so many jobs dependent and such a large part of the economy depending on the car industry, here are five things that will help to boost sales.

1. Get Brexit done

For years before Covid-19 emerged, car makers both in Britain and around the world listed the UK leaving the European Union as a huge worry

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Blowing out of the trading bloc without a free trade deal is likely to mean 10pc tariffs under World Trade Organisation rules, pushing up the cost of cars

About 80pc of the 1.3m cars made in the UK last year were exported, mostly to Europe, with an even larger amount travelling the other way. 

Similarly, car components are widely travelled before being assembled, often crossing borders several times as they are built up into sub-assemblies before being put together on production lines.

If Britain were to leave without a free trade deal, these parts could face face levies, not to mention delays as customs and border controls were reintroduced.

This would upset the automotive industry’s finely balanced production system that depends on parts arriving at factories often just hours before being put together into completed cars.

Achieving a free trade deal to avoid these problems would avoid price rises that could deter purchases.



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