Richard Bartlett-Rawlings, partner at RSM, comments: ‘The signs were already there that we could have expected a drop in August’s figures, however the 40 percent fall from 85,000 units to 51,000 is significant. We had already seen a reduction in new vehicle registrations from the beginning of September, possibly fuelled by the impact of redundancies cutting into sales and also government support schemes for specific such as the cut to Stamp Land Duty Sales Tax, mean buying a car is not a priority. This will not change anytime soon.
‘There is a lot of concern for the future. The support announced yesterday in terms of the Job Support Scheme and extension of government loans will help but there are other huge hurdles in the way of recovery. Feedback across the industry suggests that production and demand levels may not get to back to pre-coronavirus levels until 2024-25.
‘The impacts of local lockdowns, both in the UK and overseas, on supply chains and the impending Brexit deadline mean that the future of the industry is uncertain. The key challenges businesses need to meet are demand planning and forecasting, which will continue to fluctuate, and supply chains being severely tested. There are practical things they can do including checking how the Chancellor’s winter plan could help, as cash flow is still a major concern across the automotive industry. They should also look to multi-source and geographically diversify their supply chain to minimise disruption should further lockdown occur here or abroad and keep speaking to supplier and customers.’