UK car manufacturing plummets -99.7% in April as coronavirus stops production

UK car production fell to its lowest level since the Second World War in April, down -99.7%, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT).1 As the coronavirus crisis forced plants to close, just 197 premium, luxury and sports cars left factory gates in the month, models that had been assembled prior to shutdowns with only finishing touches needed.

In April, instead of making cars for the UK and global export markets, many manufacturers refocused efforts on producing personal protective equipment (PPE), including face shields, visors and medical gowns for use by healthcare professionals. During the pandemic car makers have now made some 711,495 pieces of PPE, with others helping make medical equipment, including high-tech ventilators as part of the Ventilator Challenge UK Consortium.2

Output for both the domestic and overseas markets was severely curtailed in the month, with 152 cars built for export and 45 for customers in the UK. The exceptional month follows a particularly weak April 2019, when volumes fell -44.5% year on year due to temporary shutdowns as manufacturers sought to mitigate the impact of an expected end-March Brexit.

The news comes as the latest independent analysis suggests annual UK car production could fall below one million units in 2020, which would represent lower volumes than in 2009 and possibly a third lower than expected in January pre-crisis.3

Although the UK’s 168,000 automotive manufacturing employees are now starting to return to work, with around half of the country’s car and engine plants set to be operating by the end of May, factories are scaling up production along different timescales and, with strict social distancing measures in place, output initially will be restricted with a predicted loss of up to some 400,000 units by year end, compared with the January outlook, and a cost to industry of up to £12.5 billion at factory gate prices.4

Mike Hawes, SMMT Chief Executive, said, “With the UK’s car plants mothballed in April, these figures aren’t surprising but they do highlight the tremendous challenge the industry faces, with revenues effectively slashed to zero last month. Manufacturers are starting to emerge from prolonged shutdown into a very uncertain world and ramping up production will be a gradual process, so we need government to work with us to accelerate this fundamentally strong sector’s recovery, stimulate investment and safeguard jobs. Support to get all businesses through this short-term turmoil will ensure the UK’s many globally-renowned brands can continue to make the products that remain so desirable to consumers the world over and, in turn, help deliver long-term prosperity for Britain.”

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COVID-19: Support from HMRC

HMRC has a range of online support to guide businesses through the new measures, announced by the Chancellor, to help deal with the economic impacts of COVID-19.

As part of the government’s commitment to support businesses and individuals, the coronavirus Statutory Sick Pay Rebate Scheme is now live on GOV.UK.

Find out if you can use the Statutory Sick Pay Rebate Scheme, by joining the following live webinar. Ask your questions using the on-screen text box.

Coronavirus COVID-19 Statutory Sick Pay Rebate Scheme: Providing an overview of the scheme, this webinar looks at who can claim, when to start paying SSP, employees you can claim for, making a claim, keeping records, and more.

Choose a date and time

You can also check whether you can make a claim for the Coronavirus Job Retention Scheme with our live webinar below.

Coronavirus Job Retention Scheme – How to make a claim: This guides you through making a claim, including the essential information you need, what to do before you make your claim, calculating and processing your claim.

Choose a date and time

There are a limited number of spaces, so save your place now.

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Ex-Box provides industry with innovative, sustainable packaging

Exol Lubricants is committed to ensuring customers have access to sustainable options and has therefore introduced a new 20 litre packaging solution, Ex-Box, to provide customers with an environmentally friendly, recyclable packaging option.

Exclusively available from Exol, Ex-Box is a packaging innovation specifically aimed to save customers money, aid the dispensing of Exol products, and reduce plastic waste.

A wide selection of products can be ordered in Ex-Box packaging, as customers can add any of the stocked products to their usual orders or can order any Exol grades in full pallet quantities.

Steve Dunn, Exol sales and marketing director, said: “This is just one of the many steps that we are taking to ensure we are as sustainable as possible. As an industry, it’s important that we’re doing all we can to embrace environmentally friendly initiatives and play our part in making it easier for customers to recycle any packaging.”

The company also recently became one of the first UK lubricants companies to recycle its plastic containers. As part of a significant recycling initiative, Exol’s 20 and 25-litre containers are being recycled and the reprocessed material incorporated into the production of new containers.

As a lubricants blender, Exol is extremely environmentally aware, running an efficient fleet of vehicles and making effective use of the waterways in Hull and Rotherham to transport raw materials to its bulk blending plant. Exol’s effective use of barge transport is helping the company reduce its carbon footprint.

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Automotive Report 2020 released

As part of its strategy, shaping the digitisation of the Automotive Aftermarket, TecAlliance releases the Automotive Report 2020. This new edition provides even deeper market insights than before. First introduced in 1991, the company’s vehicles in operation (VIO) and original equipment services have become renowned sources of information. The latest version provides deep data analysis to ensure the long-term success for the international automotive aftermarket.

“The Automotive Report is derived from the Global Registration Vehicles in Operation (VIO) to paint a global picture of the current market situation,” explains Chief Editor, Bernd Meijers.

“For this year’s report, advanced machine learning algorithms are front and centre in the whole process of creating the VIO data. Bulk data obtained from global sources is fed into artificial intelligence (A.I.) tooling that automatically links the original raw data to the various vehicle tables with remarkable precision. The first results have revealed that the A.I. tooling ensures the best possible mapping against the global vehicle table that is known in the market — that’s how TecAlliance is building the future to serve customers’ needs.”

Product Owner, Robbert Lasoe points out further details: “In addition, data transparency is taken to a new level, providing insight into the challenges TecAlliance is facing and how it is dealing with them. For instance, at the time of writing, TecAlliance is preparing a source quality document that will tell customers precisely, which data fields it is receiving from each of its sources.”

TecAlliance has matched the global data knowledge of its data specialists, all with multiple experience in their particular fields with that of its subsidiaries in Mexico, Brazil, Asia and North-America concerning the vehicles circulating in their home markets. The Automotive Report 2020 is the result of this great team effort.

The 125 page Automotive Report 2020 is available free of charge for TecAlliance newsletter subscribers and provides most useful information about today’s Automotive trends and developments across the globe.

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Government introduces legislation to relieve burden on businesses and support economic recovery

The government has introduced the Corporate Insolvency and Governance Bill in Parliament, which will put in place a series of measures to amend insolvency and company law to support business to address the challenges resulting from the impact of coronavirus (COVID-19).

The Bill consists of 6 insolvency measures and 2 corporate governance measures.

The insolvency measures will provide vital support to businesses to help them through this period of instability.

Business Secretary Alok Sharma said: “This is a particularly challenging time for businesses right across the UK, and we are doing all we can to support them through this period.

“Our proposals have been widely welcomed by business groups. The Bill will help companies that were trading successfully before the COVID-19 emergency to protect jobs and put them in the best possible position to bounce back.”

The corporate governance measures will introduce temporary easements and flexibility to businesses where they are coping with reduced resources and restrictions.

This Bill will do this through:

  • introducing a new moratorium to give companies breathing space from their creditors while they seek a rescue
  • prohibit termination clauses that engage on insolvency, preventing suppliers from ceasing their supply or asking for additional payments while a company is going through a rescue process
  • introducing a new restructuring plan that will bind creditors to it
    enabling the insolvency regime to flex to meet the demands of the emergency
  • temporarily removing the threat of personal liability for wrongful trading from directors who try to keep their companies afloat through the emergency
  • temporarily prohibiting creditors from filing statutory demands and winding up petitions for coronavirus related debts
  • temporarily easing burdens on businesses by enabling them to hold closed Annual General Meetings (AGMs), conduct business and communicate with members electronically, and by extending filing deadlines
  • allowing for the temporary measures to be retrospective so as to be as effective as possible.

Temporary easements on filing requirements and AGMs will include more flexibility around when and how AGMs are held, and extensions to deadlines for:

  • confirmation statements
  • accounts
  • registrations of charges (mortgage)
  • event-driven filings, such as a change to your company’s directors or people with significant control.

The Bill will now make its way through Parliament. Many of the measures in the Bill will need secondary legislation before they come into force, and this will be introduced in due course.

Nothing will change until that legislation is introduced.

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“Scrappage schemes are not the answer,” says IAAF

With vehicle manufacturers (VMs) joining forces to call on the government to help the struggling car industry get moving again, the Independent Automotive Aftermarket Federation (IAAF) is stressing that a new scrappage scheme may not necessarily be the answer.

The British car industry has struggled as a direct result of the coronavirus in recent months, and many are calling for the introduction of a scrappage scheme to look to give consumers an incentive to purchase a new vehicle.

While the IAAF recognises that it is imperative to get the economy back in gear, it believes there are other ways to do so and a scrappage scheme is not the only way.

The federation is arguing that if introduced, it will have a significantly negative effect on public mobility and the automotive aftermarket long term, especially as most of the vehicles eligible for the scheme will still be very much roadworthy.

This prediction is based on previous experience as in 2009, a scrappage scheme removed 400,000 serviceable vehicles from the aftermarket, with more than 90 percent of vehicles sold under the scheme originating from non-UK factories. In 2020, the situation remains largely the same with 88 percent of cars sold in the UK during 2019 being imported.

As the UK aftermarket also employs approximately 347,000 people as opposed to 186,000 in vehicle manufacturing, employment in the independent automotive aftermarket would be damaged by a scrappage scheme and jeopardise thousands of repair businesses. This would also be detrimental to motorists and customer choice.

With a newer vehicle parc, there is also a risk that VMs could potentially gain a monopoly on access to vehicle technical condition data, raising the question of data access.

With the forthcoming block exemption legislation renewal due in 2023, IAAF is continuing to argue that the aftermarket should have the same access rights as the franchised sector, providing the workshop is equipped with appropriate tools and equipment, thus creating a level playing field for all.

Wendy Williamson, IAAF chief executive, said: “Motorists are currently under great pressure, and they should not be penalised for keeping hold of vehicles that are in good working condition and can continue to be serviced, repaired and maintained long into the future.

“Not only is this unfair to consumers, but it is putting the aftermarket at great risk, as it will result in a direct decrease in the number of vehicles entering independent garages.”

Williamson added: “Changing the habits of consumers is difficult, and if the scrappage scheme is introduced, there is no guarantee that a motorist will opt for an electric vehicle over a petrol or diesel vehicle. Perhaps a more feasible option would be to introduce a limited scheme targeted at those living closest to clean air zones as demand for electric vehicles will be higher in these areas.

“It’s crucial that any proposals are reviewed as the economic impact of a scrappage scheme could be detrimental to the aftermarket and place an unnecessary financial burden on the consumer.”

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Latest videos added to Melett technical library

Melett has launched a series of educational, technical videos highlighting common turbocharger failures.

The latest video, ‘How does overspeeding cause turbocharger failure’ can now be viewed here. During this video Melett analyse what causes overspeeding, demonstrate the signs of overspeeding and how to prevent turbocharger failure caused by overspeeding.

The video ‘How does foreign object damage cause turbocharger failure’ can be viewed here. During this video Melett analyse what causes foreign object damage, demonstrates the signs of foreign object damage and how to prevent turbocharger failure caused by foreign object damage.

For further information on foreign object damage, CLICK HERE.

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Advisory Fuel Rates from 1 June 2020

These rates apply only to employees using a company car and come into effect from 1 June 2020. You can use the previous rates for up to 1 month from the date the new rates apply.

Engine size Petrol – amount per mile  LPG – amount per mile 
1400cc or less  10 pence 6 pence
1401cc to 2000cc  12 pence 8 pence
Over 2000cc  17 pence 11 pence
Engine size  Diesel – amount per mile 
1600cc or less  8 pence
1601cc to 2000cc  9 pence
Over 2000cc  12 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Advisory Electricity Rate
The Advisory Electricity Rate for fully electric cars is 4 pence per mile.

Electricity is not a fuel for car fuel benefit purposes.

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MAHLE supports distribution network during pandemic crisis

MAHLE Aftermarket UK is adjusting to the new ‘normal’ to sustain critical activities and support their wide customer base of distributors and independent garages.

OEM production has experienced unprecedented levels of factory shutdown, with new vehicle sales not possible in many areas and demand at an all-time low. In the UK aftermarket, due to closure of many distributors and garages, the market has fallen considerably.

But despite this, many opportunities still exist, says MAHLE and the company is working with customers to take full advantage.

While regular service products such as filtration are in decline, sales of distress parts including rotating electrics and engine components continue at almost normal levels. It is clear that demand is still present to keep vehicles on the road for essential journeys, even in light of the MOT extension period. In support, the MAHLE reduction in minimum order values to qualify for free next day carriage has been extended into May.

The MAHLE supply chain is also as strong as ever, with hundreds of pallets arriving into Bilston every week from European distribution hubs as normal.
In accordance with social distancing measures and government guidelines, colleagues are fully protected with PPE and strict one-way routes through the warehouse. Due to the advanced Pick by Voice solution, it is also possible to enforce social distancing through the warehouse management system.

As with many other businesses, the current situation has presented an ideal opportunity to push forward with digitalisation plans. All office staff now have the ability to work completely from home, and the Customer Care call centre functions as normal with the team connecting remotely.

Most administration tasks have already changed to fully digital or are in the process of going paperless. Hundreds of customers have now been set up on the MAHLE eCommerce portal, allowing them to check pricing and stock availability, or even request returns from any device with a web browser.

Jonathan Walker, Managing Director MAHLE Aftermarket Ltd, said: “The MAHLE Aftermarket UK team have performed admirably adjusting to the new normal and we are working around the clock to support customers’ changing requirements. MAHLE Aftermarket UK is fully open for business and we’ve enhanced the support customers receive through greater investment in digital connectivity and ecommerce solutions.”

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ECP launches new solution as garages look to benefit from post-lockdown demand

Euro Car Parts has launched a new online service to match trusted garages with local customers in need of essential maintenance work.

Garages must meet specific quality criteria to be part of the ‘Fit It For Me’ service, which has been designed to give new and existing customers the confidence to use the independent aftermarket rather than returning their vehicle to a dealership.

Live on the Euro Car Parts consumer website now, the service allows drivers to select from 1,850 approved garages nationwide when buying parts, along with a time and date for the parts to be fitted.

The parts are then delivered direct to the customer’s chosen workshop, minimising the need for close quarters interaction between technicians and their customers, and helping them adhere to social distancing guidelines.

Andy Hamilton, CEO at Euro Car Parts, said: “Fit it For Me will open new revenue streams for independent garages and introduce them to new customers, at a time when many have been operating at reduced capacity due to lockdown restrictions.

“We expect to see a surge in demand for service and maintenance work when drivers get back on the road, as many vehicles will have developed faults while out of use. This new service will help direct that demand into the independent aftermarket, in a way that can be managed easily and safely.

“Beyond the initial transaction, we’re confident that Fit it For Me will give independent garages – with their unique expertise and focus on local customer service – the chance to forge long-lasting relationships with an expanding customer base.”

To ensure full compatibility, customers must input their vehicle registration number before they can buy any parts. Items such as bulbs, car batteries, engine oil, oil filters, brake pads and brake discs can all be ordered through the service.

Appointments are available to book between 48 hours and 10 days in advance, with contactless drop-off and pick-up times confirmed by the garage. Customers will pay the garage directly for the installation, with no referral fee.

Andy Hamilton added: “The UK has one of the most advanced ecommerce sectors in Europe, and we want to help independent garages tap into this rapidly growing area of the market. Of all online parts sales in the UK, half are ultimately installed by garages anyway – our ambition with Fit It For Me is to simplify the process and maximise the benefits for garages and their customers, by ensuring quality repairs, first time, every time.”

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