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UK car showroom closures costing £61m a day

Pressure is mounting on the UK Government to reopen UK car showrooms as new calculations reveal the £61m daily cost of closure.

The SMMT has called upon government to unlock wider automotive sector by opening showrooms to drive demand, boost manufacturing and help support economic recovery

Although dealers have been permitted to offer ‘click and collect’ services, the earliest dealers are allowed to open is 1 June.

But with latest SMMT data showing the new car market fell 97.3% in April, the industry has said for weeks that the country’s 4,900-strong network of new car showrooms should be re-opened as a matter of urgency to help drive customer demand.

New calculations from the Society of Motor Manufacturers and Traders (SMMT) have revealed the £61m daily cost to the Treasury of keeping dealerships closed, through lost tax income and essential furlough funding.

The SMMT added that car showrooms, which are generally large spaces, lend themselves more readily to social distancing, and manufacturers and retailers have been working hard to implement comprehensive measures to ensure the safety of customers and staff during every interaction, from browsing and vehicle demos, to test drives and transactions.

Such a move would also help take pressure off public transport and boost the UK’s £82bn automotive manufacturing sector, which has already been hit by losses of more than £8bn. Although production lines are gradually beginning to roll again, with almost half of the country’s car and engine plants set to be operating by the end of May, output is at a much slower pace as manufacturers enforce strict social distancing measures and market demand remains subdued.

Mike Hawes, SMMT chief executive, said: “Government measures to support the critical automotive industry during the crisis have provided an essential lifeline, and the sector is now ready to return to work to help the UK rebuild. Car showrooms, just like garden centres, are spacious and can accommodate social distancing easily, making them some of the UK’s safest retail premises.

“Allowing dealers to get back to business will help stimulate consumer confidence and unlock recovery of the wider industry, boosting tax revenue and reducing the burden on government spending. Unlike many other retail sectors, car sales act as the engine for manufacturing and reopening showrooms is an easy and relatively safe next step to help get the economy restarted. With every day of closure another day of lost income for the industry and Treasury, we see no reason for delay.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.