Coronavirus: Car industry warns one in six jobs at risk
The Society of Motor Manufacturers and Traders says there is a "critical need" for help as the furlough scheme comes to an end.
Tuesday 23 June 2020 07:39, UK
Britain's car industry is calling for a package of support measures including VAT cuts as it claims one in six jobs in the sector are at risk due to the coronavirus crisis.
The Society of Motor Manufacturers and Traders (SMMT) said that with a third of workers still furloughed - and government subsidies for those temporarily laid off due to end in the autumn - there is a "critical need" for help.
More than 6,000 job cuts have been announced in the sector in June, the SMMT said.
Factories shut down in March as the lockdown began and though some have now reopened, many are operating at reduced output, while some remain shut.
A combination of reduced demand and social distancing are slowing productivity, the SMMT said.
The trade body's latest survey suggested up to one in six jobs in the industry - which employs nearly a million people including 168,000 in manufacturing - are at risk.
It expects car and van volumes to fall by a third to 920,000 this year.
In April, the number of cars made in Britain fell by 99.7% - hitting its lowest level since the Second World War.
Figures from the CBI this week showed car making was among the worst hit industries as manufacturing suffered a record decline in the three months to June.
The SMMT is calling for measures including "unfettered access to emergency funding, permanent short-time working, business rate holidays, VAT cuts and policies that boost consumer confidence".
SMMT chief executive Mike Hawes said support from the government - which is currently paying 80% of the salaries of furloughed workers under its job retention scheme - has been "unprecedented".
"But the job isn't done yet. Just as we have seen in other countries, we need a package of support to restart, to build demand, volumes and growth," he said
The sector, Britain's biggest exporter of goods, is also worried trading terms with the European Union could worsen after a Brexit transition period finishes at the end of 2020.
"A 'no deal' scenario would severely damage these prospects and could see volumes falling below 850,000 by 2025 - the lowest level since 1953," the SMMT said.