New figures hint at business bounce back

New figures have found that about 19,000 automotive businesses were closed between 20 April and 9 May. That equates to 124,000 jobs.

Meanwhile, of those who continued trading, 37 per cent said their turnover had decreased by more than half.

However, these figures are a slight improvement on the previous period, when 24 per cent of businesses were closed. This suggests that about 9,000 businesses had opened again in late April or early May.

Steve Nash, CEO of the Institute of the Motor Industry (IMI) believes that while this is a good sign for the automotive retail sector, motorists will still need encouragement to get back to their garages and dealerships. The IMI is therefore planning a consumer campaign to raise awareness of the importance of getting vehicles MOT’d and serviced before they go back to regular use.

Nash said: “The news that car showrooms can open from 1 June – as long as appropriate hygiene and social distancing measures are in place – will be a relief for the sector as a whole, but especially for the seven per cent of automotive businesses that said that they either had no cash reserves or less than a month of cash reserves, potentially putting 5,600 businesses at risk. But there is still a concern that motorists will be putting off getting their vehicle serviced or MOT’d, especially while government holds back on scrapping the MOT extension.

“The IMI will, therefore, be campaigning during June to raise awareness amongst motorists that if they are using their vehicles more regularly they are legally required to ensure they are completely roadworthy. The government has always been clear that while the MOT extension is in place vehicles on the roads must be safe.

“And we know that MOT stations and garages are ready and able to provide an effective service – supported by industry bodies such as ours in making sure their workplaces are able to abide by the hygiene and social distancing guidelines. Indeed the take up of the recently published Covid-19 Best Practice Guide proves that the sector is absolutely prepared for the task.

“We will also continue to lobby government to scrap the MOT extension, working alongside a number of the industry’s trade associations.”