UK auto industry will struggle without targeted government support

Following the news that the UK Government has launched a stimulus package to support the UK economy, but omitted any automotive sector specific measures such as scrappage incentives;

David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:

“The UK Government faces a big challenge in getting the UK economy back up and running again and there are naturally competing claims for support measures from different sectors. However, the automotive industry is understandably concerned that the government has not yet chosen to introduce sector specific measures for the UK automotive sector.

“Financial or scrappage incentives designed to encourage consumers to trade in their old vehicles for more environmentally friendly new vehicles have been introduced in a host of European countries. In the UK, too, they would lift retail activity, help get the industry back to work and provide a much-needed boost for the UK economy.

“They could also be framed to encourage the sale of greener cars, helping UK companies active in emerging advanced technologies such as electrification.

“GlobalData forecasts that the UK light vehicle (including light commercial vehicles as well as passenger cars) market in 2020 will be down by 33.2% at 1.85 million units – and that forecast is predicated on some form of incentive being introduced in the second half of the year.

“The automotive industry in Britain – which also faces the headache of the possible imposition of new trade tariffs on EU business next year – will struggle without targeted support. The automotive sector has been particularly hard hit in this crisis, with thousands of job losses already announced and many more at risk.”

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