The auto industry has been hit particularly hard by the lockdown, with dealer closings cutting off a large chunk of revenue, while all of Europe’s major auto factories have been forced to shut down temporarily due to supply chain issues and concerns for worker safety.
July was the first full month of nationwide trading after dealers were allowed to reopen to customers on June 1 in England, June 8 in Northern Ireland, June 22 in Wales and June 29 in Scotland. This followed extensive lobbying from the industry, which feared that several thousand jobs would be lost.
Most UK factories, with the exception of Ellesmere Port factory in Vauxhall and Aston Martin’s main factory in Gaydon, have restarted production, but the outlook for the industry is bleak as an unemployment crisis is looming.
British production in the first half of the year was the lowest since 1954, when the rationing of World War II ended, with just 381,357 cars rolling off lines.
The auto retail industry was already under particular pressure due to structural changes such as the growing – albeit belated – popularity of online car sales, with foreclosure further diminishing profitability.
Auto dealer groups have already been forced to cut thousands of jobs, with Lookers making 1,500 layoffs in June, Pendragon cutting 1,800, and Jardine Motors cutting 500. Another dealer, Inchcape, said it would cut jobs from head office, although it has not yet provided Numbers.
More gloom is expected in factories and dealerships as the economic crisis unfolds. The SMMT tally suggests that more than 13,000 job cuts had been publicly announced so far in 2020 in the sector.