LEADING figures in the automotive industry have been speaking out about the effects of today’s Autumn Statement on dealers and motorists.
James Tew, chief executive at iVendi, said: ‘There are individual things in the Autumn Statement that are reasonably positive news for the motor industry and car drivers in general. However, these are overshadowed by the overall economic outlook.
‘I personally don’t envy the chancellor the job of sorting out the situation in which the UK currently finds itself. By several measures, the economy is not doing too badly, perhaps even quite well, but the uncertainty that surrounds Brexit creates a high degree of instability, and Mr Hammond made it clear that we are looking at increased borrowing, higher inflation and weaker growth.
‘This cannot help but have an impact on the UK new and used car markets. The question is one of degree. What dealers should be doing now, in direct response, is ensuring that they work to maximise every sale opportunity, using the most advanced and effective tools available.
‘From an iVendi point of view, we were interested to see the investment that is being committed to 5G communications network development. Mobile devices are very much the most popular means by which buyers search for new and used cars – so faster, more reliable internet access, wherever you are, is good news for dealers.’
Rupert Pontin, Glass’s director of valuations, said: ‘The chancellor has underlined how tricky the next few months and years are likely to be because of the economic turbulence created by the Brexit vote. While the underlying strength of the economy is pretty good, at least in comparison with other, similar countries, we are entering a period where growth will slow, inflation will rise and borrowing will be higher. None of these things is good for the general economy and certainly not encouraging signs for the motor or fleet industries or for private or business motorists. These are going to be reasonably unpredictable times.
‘That is today’s real story but, having said that, there are some points of interest in there. Primarily, there is an underlying push towards ULEV [ultra-low-emission vehicle] technology that can be seen in the changes to salary-sacrifice rules, the new company car tax rates for 2020-21 and even in the capital allowance for EV chargers. It seems pretty clear that the government envisages us driving around in largish numbers of electric and advanced hybrid vehicles within five years which, in our view, is a good match for the rate of development of EV technology. This will probably help to power new car sales.
‘At a more prosaic level, for the motorist using their car today, the fuel duty freeze is good news, as are the measures designed to minimise false whiplash claims that are pushing up motor insurance premiums. For people whose personal budgets are under some pressure, these measures are worthwhile if unspectacular.’
Paul Burgess, chief executive at Startline Motor Finance, said: ‘We live in confusing and contradictory times, and today’s Autumn Statement reflects this. While, using some of the key measures, the UK economy is not doing too badly at all, we are set to enter a period of some turbulence, something that is likely to continue until the terms of our exit from the European Union are settled and agreed. A large increase in public sector borrowing, rising inflation and substantially reduced growth forecasts are all closely related to this.
‘What does this mean for the motor finance sector? Well, people generally are likely to have less money in their pockets and perhaps even face greater uncertainty over their future employment prospects. Over a period of time, this could potentially have an impact on the shape of the market. Fewer borrowers are likely to meet the requirements of prime lenders and, as we have long been predicting, the market could become more sophisticated, with a broader spread of motor finance providers offering a clearly signposted, broader spread of risk appetites.
‘This is something that actually presents opportunities for informed dealers. By creating a lender panel that reflects this change, you will be in a position to present your customer with a wider range of motor finance choices in a responsible and transparent fashion, allowing them to make a highly informed buying decision. This would be a positive development for used car buyers and, of course, used car sellers.’
Motoring industry profitability specialists ASE said in a statement: ‘Faced with the uncertainty of Brexit, the chancellor did little to identify the motor sector as an area of concern, choosing the moment to invest in infrastructure to promote long-term growth in the UK economy overall.
‘The extensive road building programme recognising the need to upgrade existing highways, not least to enable the development of much-needed housing, will improve the motor industry to the extent that this leads to greater demand for new and improved vehicles. In this regard, the move towards green energy continues apace with the immediate introduction of a 100 per cent tax allowance for the cost of construction of electric car charging stations, and is further confirmed by his concession that ultra-low-emission cars will not be targeted as part of his reforms of “salary-sacrifice” arrangements, where employees traditionally exchange cash reward for very attractive taxable benefits as part of their contract of employment.’
Main image: Philip Hammond leaves 11 Downing Street today to deliver his Autumn Statement in the House of Commons. Picture by Stefan Rousseau PA Wire/PA Images
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