One in 6 jobs are at risk of redundancy without the government’s support in restarting production, said the UK car industry’s trade body.
The Society of Motor Manufacturers and Traders (SMMT) said emergency funding, permanent short-time working, business rate holidays and VAT cuts are needed to stem the flow of job losses.
Showrooms are reopening and production lines are restarting, but more than 6,000 jobs were lost in the automotive sector this month.
Carmakers have high fixed costs to pay, including rent, and during this time where car sales are sharply down, many workers resin furloughed as companies work out how they can operate while accommodating social distancing.
“A third of our workforce remains furloughed, and we want those staff coming back to work, not into redundancy,” said Mike Hawes, SMMT chief executive.
“Government’s intervention has been unprecedented,” he added. “But the job isn’t done yet. Just as we have seen in other countries, we need a package of support to restart; to build demand, volumes and growth, and keep the UK at the forefront of the global automotive industry.”
While the industry is already anxious of the repercussions of COVID-19, it also needs to hear more about securing a trade deal with the EU.
Other car manufacturers like Jaguar Land Rover (JLR) have also voiced their concerns about keeping factory staff working.
Mr Hawes told the BBC’s Today programme that UK car manufacturers could not afford to pay import tariffs on components arriving in the UK from abroad, as the cost would be more than their profit margin.
He added: “It is vitally important that the government achieves its ambition, which is a trade agreement before the end of the year.”
It has been estimated that the impact of lockdown will cut annual car and light commercial vehicle production by one-third to 920,000 vehicles this year.
Image credit: Jaguar Land Rover
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