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The Society of Motor manufacturers and Traders (SMMT) is asking the UK government to release a support package to help revive the country’s automotive sector after being severely affected by the pandemic. 


The automotive industry is one of the UK’s largest economic sectors, contributing close to 168,000 high skilled jobs. However, close to 6,000 job loses were announced this month because of closed markets and lockdowns. Production lines in England and Wales are open this month, but demand has dropped and mandatory social distancing has slowed down productivity.


The UK’s annual car and light commercial vehicle production is going to be just 920,000 units this year, which is a third lower than last year. Normal production levels are expected to return by 2025, when close to 1.35mn units per annum will be produced. If the UK’s government doesn’t release a support package, automobile production volumes could fall as low as 850,000 units annually by 2025, SMMT said. 


SMMT suggested the support package should include emergency funding, permanent short time working hours, VAT cuts, and more. It added that this would boost consumer confidence and ensure the market successfully restarts.


The industry also anticipates a positive outcome from free-trade agreement talks, which have the potential to give the UK a zero-tariff deal, according to the report. A positive outcome of these talks could also alleviate uncertainty around Brexit and the ongoing jobs crisis in the country, as well as give businesses time to prepare for the deal.


SMMT chief executive Mike Hawes stated that, although the UK automotive sector is fundamentally strong, the pandemic adversely affected the industry. He added that the government’s intervention has been unprecedented, yet a new package of support to enhance demand, volumes and growth in the sector is inevitable. 

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