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Summary
- Output plummeted by 27 per cent in January to 86,052 vehicles, as per latest SMMT data.
- The trade body has said that Rishi Sunak should use the budget statement to boost the sector’s competitiveness.
- If the industry’s concerns are not met, it might miss on its environment goals as well.
Car output in January for Britain dropped by 27 per cent year-on-year hit by dealership closures, global supply chain disruptions and change in trading terms with the European Union, says data released by the Society of Motor Manufacturers and Traders (SMMT) on Friday, 26 February.
The cars production has dropped to 86,052 vehicles for the month, its lowest level since the year 2009.
The leading car makers association has sought government’s help in the forthcoming budget to boost the UK car sector’s competitiveness as Rishi Sunak is preparing compensation packages for sectors to support the economy recover from coronavirus slumps.
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Mike Hawes, CEO, SMMT, said that the chancellor has a good opportunity in form of the annual budget to lift up the industry by introducing measures to protect its livelihoods and make it more competitive. The sector needs conditions that attract private investment for growth and transform the supply chain. The association seeks extension of the furlough scheme apart from jobs training support. It has also asked the government for a favourable business rates tax reform.
Low car sales
Earlier, SMMT had estimated that over 90,000 cars were sold in Britain in January, the slowest car sales in the past 50 years. These sales were 40 per cent lower than January 2020 figures. Closure of car showrooms had compounded the economic slowdown. The only solace was that the click-and-collect-sales medium prevented an even bigger fall, the SMMT data pointed out.
Hawes informed that the UK car sector lost £20.4 billion revenue last year and had a very tough start to 2021. The analysts said that unless the dealerships reopen at the earliest, retailers would not be optimistic of a pent-up demand fuelling growth and any rising registrations of zero emission cars.
Missing green goals
While it can’t be denied that the lockdowns were necessary, but they did challenge the industry’s ability to quickly move ahead with growth targets and environmental goals. The industry is slated to touch a fleet average target of 95g per km this year from a higher value of 112.8g/ per km achieved last year. Else it is liable to face huge financial penalties.
March numbers
The month of March is always the most crucial one for car sales with the highest monthly vehicle deals usually recorded in the month as the accounting year gets changed. Normally, the number plate changes alone account for one-fifth of annual registrations for March. But given the uncertainties, we need to wait and watch for the situation this year, say the market experts.
