5:23 pm, August 4, 2020
The government has done a top job with stimulus packages during the pandemic but it let the automotive industry down when it came to help with interpreting the rules.
That was the view of Fix Auto UK managing director Ian Pugh when he appeared on Car Dealer Live on August 3.
The boss of the network of collision repair experts told host James Batchelor how its sites had been classed as industrial repair so didn’t qualify for financial help such as business rate relief because they weren’t seen as retail.
‘What we found was that the government would apply a central policy but that would be interpreted differently by each local authority. For example, we were told “You’re industrial repair, therefore you’re not going to get a grant because it’s not a retail environment.”
‘But because we’d recently launched Fix Auto Finance, which is an interest-free finance model for consumers, we were able to use that to convince the local authorities that we were in fact retail, and that gave us an automatic business rate relief as well.
‘Broadly speaking, we probably secured £50,000 per site in terms of funding, and that gave us about £2.3m for our network.’
Some companies might have kept those findings to themselves, but not Fix Auto.
‘What we then did was say “Everyone’s in the same boat here, so while we have competitors who are competing, let’s help them secure the grants themselves”, because we’d actually worked out a pattern how to do it,’ said Pugh.
‘So we went public with that with our competitors and shared that with them. I even had BMW GB write to me and say could we share our knowledge, which was great – we were more than happy to, because ultimately we wanted to save the industry.
‘We’d seen numbers of body shops closing, between 10 to 20 per cent, so the more we could do to help the industry survive, the better, so we just created templates and shared them on our website.’
Batchelor suggested that there hadn’t been enough support or focus by the government on the whole automotive industry, and Pugh agreed, saying: ‘I think so. Certainly, we’ve had very little support in terms of interpreting processes.
‘The government has been fantastic with these stimulus packages. It’s a monumental achievement what they’ve done in such a quick time, but we had to row our own boat effectively in terms of interpreting the government legislation and then applying that across our sector.
‘That’s why we went to the industry and said “Look, how can we share our learning with you?” We’re fortunate, as we had 107 partners and we could collate and share our knowledge and a number of the successes that we had was from our franchisees – they created some templates and documentation.
‘But if I was a business owner on my own today during Covid, it’s a lonely place to be, and without that support it would have been a lot tougher.’
He added: ‘We certainly saw payments being made very very quickly, but I think it was more about interpreting the policies and trying to cut through the red tape and bureaucracy, and that’s where we were able to, as a head office team, just focus our time purely on cutting through that red tape and bureaucracy.
‘I don’t think it’s anyone’s fault. I think it was just unfortunate that local authorities were probably under-resourced before Covid and when Covid hit they had a tsunami of requests for funding and it probably overwhelmed them, but ultimately it was a lot of chaos.’
Reflecting on the past few months, he commented that the revenue plug had effectively been plugged from its business, with revenue down 74 per cent in April and 65 per cent in May. June saw a slight recovery at 45 per cent down, while July was 37 per cent down.
He expected August to be the same as July, but if the schools return in September that’ll generate more business. ‘The school run is a profit centre for us, sadly,’ he said.
And he had a blunt warning… ‘What we’ve seen as well is people are optimistic about their forecasts, so my advice is be pessimistic, be prudent and then you’re playing safe.
‘A lot of people are talking about claims volumes returning to 90 per cent within a month – well, that’s not going to happen. We’re probably likely to see at best 75 per cent maybe 80 by year end.’
Watch the interview in full – in which, among the other subjects, Pugh also talks about helping furloughed staff with a phased return to work – by clicking on the main image.
You can see all of our Car Dealer Live interviews by clicking here
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