Car dealers appeal against lockdown closures

Showroom owners say they can operate safely as they seek to stay open to prevent more job losses

Car manufacturers and dealers are on a collision course with the Government, appealing to be allowed to keep selling vehicles through the new lockdown and avoid damaging job losses across the industry.

Under the controls coming in from Thursday, dealerships will have to shut despite saying they can operate safely compared with most other retailers.

They argue their larger premises allow social distancing, while generally lower customer numbers and visits, which are often by appointment, mean infection risks are minimal.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: “As England heads back into lockdown, we need to keep business operating. Auto manufacturing must have its showrooms open; it’s proven safe and secure, a very different environment from other retail premises.

“We need to keep the economy turning - safely - and prevent wider job losses.”

He added: "With plants commonly building to order, demand directly drives production. If car dealers in England are forced to close this Thursday the impact on manufacturing could be quick and severe.

"Closing these retail spaces, and the knock-on effect to manufacturing, would be a massive blow economically and, given the fragile state of much of the sector, to many more livelihoods.”

The SMMT calculates that the pandemic and lockdowns have caused a 615,000 shortfall in new car sales in the first nine months of the year.

It now expects the car industry to record a 30pc sales drop in the full year, equivalent to £21.2bn. That follows September car sales hitting a 20-year low, despite it usually being a bumper month for the industry.

Current government guidance appears to allow “click and collect” sales for the automotive industry, but many consumers are reluctant to make large purchases online. 

Car plants are being encouraged to keep operating through the lockdown, with the Government saying manufacturing is not affected by the controls.

However, many car companies build to order, meaning with dealers unable to sell in the normal way, demand is likely to be choked off. 

This could result in factories being shuttered amid uncertainty over whether the lockdown will run beyond the expected month.

Shutdowns would send shockwaves throughout the automotive supply chain, which is only just recovering from the last forced closures, and could push smaller companies to the wall.

The National Franchised Dealers Association (NFDA) has also written to the Government to warn of the likely impact.

Sue Robinson, chief executive of the trade body, said: “Closing showrooms will not only damage the livelihoods of 590,000 people working in auto retail, it will reduce car sales to the point where car factories will have to stop production. Vehicle retail is an essential economic activity.”

She added: “Vehicle dealerships should open - they are safe spaces. Since reopening, dealerships have not caused Covid-19 to spread over the past five months - and nor are they causing it to spread today.”

Leading car dealer bosses also questioned the logic of being forced to close. 

Daksh Gupta, chief executive of 132-showroom Marshall Motor Group, said: “How can garden centres be allowed to open and not retailers with all that space?”

Taking to Twitter, Mr Gupta posted images of a garden centre - one of the types of retailers which will be allowed to remain open - asking: “Why can these remain open and car showrooms with more space and... visitors can’t?”

Robert Forrester, chief executive of Vertu, which has 140 showrooms, added: “Some businesses will be in the balance on the decision. I suspect this disruption will not end Dec 2 so big decisions to be made. Easier the second time round? Not when it impacts peoples’ livelihoods and health.”