SMMT keeping all lines of dialogue open with UK government over stimulus package for car industry

Time 1 year ago

The SMMT is keeping all lines of communication with the government open as it looks to keep the option of support for the automotive industry alive.

SMMT chief executive Mike Hawes has told Car Dealer the trade body is in ‘clear dialogue’ with the government who are monitoring the automotive industry’s situation carefully before pulling the trigger on a stimulus package.

Hawes said with sales rising in July and looking buoyant for the key September plate change it is critical support for the industry is given at the right time.


Speaking to Car Dealer Live, in a video you can watch above, he said: ‘The government was never going to say “we’ll let you reopen and here’s a market stimulus measure”.

‘The government support for the economy has been huge, furlough in particular, and all of the loans schemes. 

‘This is billions and billions of pounds invested into the country to try and keep it alive.

‘Without that so many automotive businesses with retail or manufacturing would have been in a much, much worse position. 

‘The government has tried to avoid intervening in particular segments.’

The SMMT and representatives from the industry are believed to have been in regular conversation with the Department for Business, Energy and Industrial Strategy about how they can help support the market.

It is believed a scrappage scheme was carefully considered, but then ruled out as it was too early to see whether the industry needed support. 

A VAT cut was also rumoured to be considered, but was only implemented for the hospitality and tourism sectors.

Hawes said: ‘What we’ve been trying to do is clearly have a dialogue with the government.

‘We just have to keep that dialogue open and make sure we’re presenting the facts about what is actually happening.

‘If we do need specific government intervention to the sector, bare in mind as you get towards the end of the year there are a lot of things that are going to come to fruition – both good and bad – so we will need to keep very close to the government.’

Hawes said the SMMT was monitoring the car market very closely to see what the underlying level of demand is. It has already cut its forecast for this year by 30 per cent.

Hawes added: ‘We are forecasting a 30 per cent drop from where we expected to be. 

‘Now, it is a bit finger in the air, because we’ve not been in this situation before, but that’s the general perspective. 

‘It will be down, but we lost two and a half months. We’ve haven’t yet recovered that.’

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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