SMMT ‘building up for begging bowl request’ for government support after slamming September new car market

Time 10:47 am, October 5, 2020

Industry experts believe the Society of Motor Manufacturers and Traders (SMMT) may be angling for government support for the automotive sector.

Today, the trade body published its data for the crucial September plate change month with an overly negative commentary as registrations totalled just over 328,000 cars.

While the total figure represents a fall of 4.4 per cent compared to the same month last year, the general reaction by those in the industry has been a positive one when a lack of pre-registrations activity and slowing new car supply are taken into account.

Speaking to Car Dealer during a live broadcast this morning, ASE Global chairman, Mike Jones, said it looked like the SMMT was positioning itself to put pressure on the government for support.

He said: ‘The tone from the SMMT is quite negative – it’s like it’s building up for a begging bowl request.

‘The SMMT are really highlighting some of the negatives here – the lowest ever September registrations since 1999, the offers are there but they’re not enough to help business and personal confidence.

‘Yes, September is down, but if we got back to 2010 and 2011, September 2020 was only slightly down on then.’

Jones said the drop was ‘all in business which, in the nicest possible way, is a drop in pre-reg’.

‘On a general level, it appears the SMMT tally wants to make a hit with this and go to government saying we need some support,’ Jones added.

The accountancy expert’s views are backed up by Jim Holder, What Car? editorial director.

‘The negativity surrounding these figures is misleading,’ he said.

‘Almost every retailer and the majority of manufacturers are reporting an exceptionally strong month, and most crucially a profitable one as they match supply and demand, opt out of unprofitable pre-reg and build a pipeline for the future months.

‘Unquestionably there is potential for an exceptionally hard time ahead as the health crisis continues, but what we see here is figures that are likely closer than ever to the true level of demand.

‘If so, they should give a strong indication of how to build a more sustainable industry going forward.’

The lack of pre-registration activity in September was definitely the reason for the drop, says Michael Woodward, UK automotive lead at Deloitte.

‘An easing of volume targets has led to dealers pre-registering fewer vehicles than we might see in a normal September,’ he said.

In announcing the September registrations data, the tune played by the SMMT was very negative, calling the month the ‘worst since September 1999’.

SMMT chief, Mike Hawes, said: ‘During a torrid year, the automotive industry has demonstrated incredible resilience, but this is not a recovery.’

Up to now the SMMT has led a positive message, especially to government.

However, with government support for the car industry so far denied, despite a case being made for help, this is likely to be a deliberate change of tact.

Bill Berman, boss of listed dealer group Pendragon, told Car Dealer last month that he thinks the government will have to step in and give help.

‘I think they’re going to have to,’ Berman told Car Dealer, in an interview you can watch below.

‘Automotive is too large a piece of the overall economy, and I think at some point they’re going to have to do something – whether it’s a scrappage scheme or a continuation of the rate or VAT holiday.’

Berman was adamant that the government will need to wade in with a package of incentives in order to stimulate new car sales.

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‘The government will have to do something later this year or early next year to get people back into the market,’ he said.

‘A perfect example is what the government did with stamp duty on real estate – it’s one little thing, but the amount of money people are saving and the rise in house prices has outstripped that and it’s propping up the economy.

‘I think the same thing would happen if there was support for automotive.’

James Batchelor's avatar

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer. In October 2021 he became Car Dealer's associate editor.

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