UK car manufacturing plant assembly line

Is the UK automotive market starting to recover from lockdown?

The nationwide lockdown forced the automotive industry to come to a temporary standstill. Now, since June, small movements have been made to get the industry back up and running once again.

Here at Scrap Car Comparison, we wanted to take another look at the impacts of Covid-19 on the UK car market and what has been happening since June.

Production losses, redundancy and Brexit tariffs

Although production slowly resumed in June with the UK manufacturing 56,594 units, strict social distancing measures combined with a weaker demand across the industry has meant that production across the UK is still suffering.

June saw a sharp improvement compared to April and May, where a total of just 5,111 cars were produced over two months – numbers this low haven’t been recorded since 1954. Since January 2020, only 381,357 cars have been built, which represents a loss of 285,164 vehicles. According to the Society of Motor Manufacturers and Traders (SMMT), the domestic market was down by 63.8% in June, compared to 89% in May. While figures are still far below where they should be, we can see the impacts of the lockdown easing as the industry gets back on its feet.

Over 11,300 jobs across automotive retail, supply chains and manufacturing have all been cut during the pandemic, with many more at risk as businesses fear higher Brexit tariffs. There are many questions and concerns when it comes to the trading conditions, procedure of customs and the tariffs around Brexit.

Increase in commercial vehicle production

Figures from the SMMT dated 30 July show that vehicle production in the UK increased by 23.9% in June, with 4,144 vans, buses and trucks leaving production lines. However, even though production began flowing again in June, the first six months of 2020 have undoubtedly impacted the automotive industry quite severely and the restrictions in place are proving challenging to work through.

Mike Hawes, SMMT Chief Executive said: “Although growth in commercial vehicle manufacturing in June is undoubtedly good news, this does not indicate a return to business as normal. The sector remains almost 9,000 units behind 2019, which will be difficult to catch back given many plants are still operating at a reduced capacity.”

What does this mean for the industry?

The automotive sector is one of the UK’s most valuable economic assets, providing over 820,000 jobs, with 168,000 of those directly in manufacturing. However, it’s possible that one in six could potentially lose their job across the industry in the UK.

Production for the UK in 2020 was estimated to reach two million, but the disintegrating market conditions due of Covid-19 means that this figure is set to be at least halved. It is expected that roughly 880,000 cars will be produced in the UK this year – that’s 30% lower than estimated back before the lockdown in January. This year is set to have the lowest production figures since 1954.

According to the SMMT, an £82 billion boost for the industry would help retain jobs across the country, in manufacturing, retail and supply chains. This boost would increase tax revenues and international trade, while also helping the government meet their climate change objectives and air quality goals.

While progress is slow, it does look like the automotive sector is slowly gearing up towards recovery from lockdown and COVID-19. One thing you can be sure of though, is where to scrap your old, unwanted or damaged vehicle – and that’s with us.

Learn how you can scrap your vehicle during lockdown or get an instant scrap value quote.

Sources: SMMT.

 
 

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