New data from the ONS for the period 20 April to 9 May 2020 shows that 20% of automotive businesses temporarily closed or paused trading; approximately 19,000 businesses and 124,000 jobs. And 37% of automotive businesses that continued to trade reported that turnover had decreased by more than 50%. Whilst the numbers are significant, they actually show a small turn-around in the fortunes of the sector. For the previous period, 24% of automotive retail businesses had reported they were closed – so the new figures suggest that approximately 9,000 businesses had reopened late April/early May.
Steve Nash, CEO of the Institute of the Motor Industry (IMI) believes that whilst this is a good sign for the automotive retail sector, motorists will still need encouragement to get back to their garages. The IMI is therefore planning a consumer campaign to raise awareness of the importance of getting vehicles MOT’d and serviced before they go back to regular use.
“The news that car showrooms can open from 1st June – as long as appropriate hygiene and social distancing measures are in place – will be a relief for the sector as a whole, but especially for the 7% of automotive businesses that said that they either had no cash reserves or less than a month of cash reserves, potentially putting 5,600 businesses at risk”, said Steve Nash. “But there is still a concern that motorists will be putting off getting their vehicle serviced or MOT’d, especially while government holds back on scrapping the MOT extension.
“The IMI will, therefore, be campaigning during June to raise awareness amongst motorists that if they are using their vehicles more regularly they are legally required to ensure they are completely roadworthy. The government has always been clear that while the MOT extension is in place vehicles on the roads must be safe. And we know that MOT stations and garages are ready and able to provide an effective service – supported by industry bodies such as ours in making sure their workplaces are able to abide by the hygiene and social distancing guidelines. Indeed the take up of the recently published COVID-19 Best Practice Guide proves that the sector is absolutely prepared for the task.
“We will also continue to lobby government to scrap the MOT extension, working alongside a number of the industry’s Trade Associations.”
The IMI campaign will target national and regional radio stations to get the message out to drivers that they should get their vehicle MOT’d and serviced, using the IMI Professional Register to identify the local garages that are appropriately accredited.