October 2020

OCTOBER 2020 AFTERMARKET 51 www.aftermarketonline.net From Thursday 1 October, the government will pay 60% of wages up to £1,875, with employers topping up the national insurance, pension contributions and 20% of wages to make sure staff still get 80%. At present, the scheme is set to end on Saturday 31 October. 1 September: Industry diversifies in face of COVID- 19 – But support still needed While almost 6,000 automotive businesses were still on the brink due to COVID-19 and 5,000 expected to permanently close within three months, diversification has provided an important boost for the overall sector, according to an analysis of Office of National Statistics (ONS) data undertaken by the IMI. The analysis showed that 13% of automotive businesses have diversified for long-term sustainability by offering new services or goods – but the IMI has also pointed out that further government support would be welcome. By early August, 97.5% of automotive businesses were trading, with a further 1.5% planning to reopen by the middle of the month. The automotive sector was also performing well compared to other sectors, with the highest percentage of businesses reporting an increase in turnover in the last week of July and first week of August. There was resilience too, as 36% said that their cash reserves would last more than six months. However, another 6% said they had no cash reserves or less than a month, potentially putting 5,700 businesses at risk. On the price of continuing to operate, 73% of businesses said their operating costs have increased, and a further 9% said that these costs had significantly increased. The government’s Coronavirus job retention scheme (CJRS) assisted in keeping redundancies at a low rate so far – about 1% of the sector workforce – with 120,000 still furloughed. However, automotive employers were predicting a potentially additional 7,000 redundancies by the end of August. 5% of businesses in the sector were intending to permanently close business sites in the next three months, and 76% of these stated that this would lead to permanent redundancies. 2 September: Scrappage definitely NOT happening: IAAF receives confirmation The prospect of a vehicle scrappage scheme, which was mooted during the late spring as a potential way to boost the UK automotive sector, was decisively quashed. The IAAF received confirmation from the Department for Business, Energy & Industrial Strategy (BEIS) that the government has no plans to introduce a vehicle scrappage scheme. Wendy Williamson, IAAF Chief Executive said: “This is fantastic news for the independent aftermarket and also demonstrates the power of IAAF lobbying activity. We believe a scrappage scheme would have put an unnecessary burden on the motorist and removed many environmentally friendly vehicles from UK roads. “The IAAF’s argument was based on previous experience from 2009, when the scrappage scheme removed 400,000 serviceable vehicles from the aftermarket, with more than 90% of vehicles sold under the scheme originating from non-UK factories. In 2020, the situation remained largely the same with more than 80 percent of cars sold in the UK being imported.” Wendy added: “As the UK aftermarket also employs approximately 347,000 people as opposed to just 186,000 in vehicle manufacturing, employment in the independent automotive aftermarket would also have been damaged by a scrappage scheme and jeopardised thousands of repair businesses.” 3 September: NGK point the way on MOTs via BoxClever NTK – the vehicle electronics brand of NGK Spark Plugs –increased the level of reward points for Lambda sensors from 100 to 1,000 points per sensor through its BoxClever garage reward programme during September, as part of its campaign to urge garages to be prepared for a surge in demand for MOTs. The number of tests being performed was set to double this autumn with an additional 1.7 million expected in October alone. Around one in 12 of these extra tests is expected result in a failure due to emissions. With exemptions beginning to expire, this autumn is looking to be a busy time for MOT testing, and ignition parts, specifically Lambda sensors, will be at the fore. NGK Spark Plugs Marketing Manager Mark Hallam said: “Garages are encouraged to insist on NTK Lambda Sensors to ensure they benefit from the temporary increase in points. Demand for MOTs this autumn is unprecedented. It is estimated that over 140,000 vehicles will fail the emissions element of the MOT test in October alone. We anticipate an increase in demand for MOTs and a subsequent increase in demand for our Lambda sensors this autumn.” 4 September: August car sales align with “quietest month” expectations New car sales were down by just 5.8% in August, as the market returned to something like normal post-lockdown, according to the latest figures from the SMMT. 87,226 new cars were sold during the month, compared with 92,573 in August 2019. August is traditionally quietest month of the year in the market. While registrations to private buyers held relatively steady, down by only 699 in the month, demand from businesses was lower, with 2,650 fewer new cars joining UK fleets, down 5.5% on August 2019. Overall, registrations remained down by 39.7% in the year to date, 600,000 behind the same period in 2019. Commenting on the figures, SMMT Chief Executive Mike Hawes observed: “The decline is disappointing, following some brief optimism in July. However, given August is typically one of the new car market’s quietest months, it’s important not to draw too many conclusions from these figures alone. With the all-important plate change month just around the corner, September is likely to provide a better barometer. As the nation takes steps to return to normality, protecting consumer confidence will be critical to driving a recovery.” Sue Robinson, Director of the NFDA, added: “We expect the movement away from public transport towards privately owned vehicles to continue to benefit the sales of new and used cars. Additionally, the increase in disposable income for a number of consumers who have not been on holiday and were able to save during the lockdown can fuel demand over the coming weeks.” www.aftermarketonline.net