DWF logo


DWF logo

            Automotive recovery is possible within five years

            Peter Barnes, Insurance Partner and Head of Automotive at global legal business, DWF, comments on today's SMMT's manufacturing figures for May 2020. He said:

            Date: 26/06/2020

            "The impact of Covid-19 has decimated car production with just 5,314 vehicles being built at UK factories in May 2020 compared with 116,035 vehicles for the same month the previous year (a fall in production by 95%). While May's figures represent a slight improvement on April, when the production of all vehicles stopped save for the finishing touches on only 197 luxury cars, the social distancing requirements and consequence of factories remaining closed or running at reduced capacity have still resulted in the worst May since 1946.

            With liquidity remaining a major issue for automotive businesses, there has been a warning by the SMMT that up to one in six jobs is at risk of redundancy when the furlough scheme comes to an end in November following a survey of its members this month. 

            Given that the UK automotive sector is fundamentally stable with a skill set admired globally, the unprecedented vital government assistance which has been provided to keep many businesses afloat needs to go further as has been seen in actions taken by governments in France and Germany in response to their own manufacturing industries. To this end, there remains hope that a car scrappage scheme enticing those with older vehicles back to car showrooms combined with a cut in VAT could make all the difference. 

            While the world has quite correctly been focused on the impact of the pandemic which has consumed every inch of capability and capacity in the automotive market, the issues which would be created by a hard Brexit in the automotive sector remain extremely real in these unprecedented times. For this reason, the confirmation that the government will turbocharge its negotiations with the EU is welcomed, and it is hoped that the results of such negotiations will secure a comprehensive free trade agreement with the EU that maintains tariff and quota-free trade. In such a scenario, a full recovery is possible within five years resulting in output reaching pre-crisis levels of 1.35million units by 2025.

            The automotive sector in the UK has been hit with extreme uncertainty over the last few years as a result of both the withdrawal from the European Union and the global pandemic of COVID-19. However, the sector is truly world-class. It is hoped that, with appropriate support and financing from the government, the figures released today from the SMMT will continue to demonstrate a rise month on month as output levels and demand increases".

            Related people

            Peter Barnes

            • Partner // Head of Automotive

            We use cookies to give you the best user experience on our website. Please let us know if you accept our use of cookies.

            Manage cookies

            Your Privacy

            When you visit any web site, it may store or retrieve information on your browser, mostly in the form of cookies. We mainly use this information to ensure the site works as you expect it to, and to learn how we can improve the experience in the future. The information does not usually directly identify you, but it can give you a more personalised web experience.
            Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change permissions. However, blocking some types of cookies may prevent certain site functionality from working as expected

            Functional cookies


            These cookies let you use the website and are required for the website to function as expected.

            These cookies are required

            Tracking cookies

            Anonymous cookies that help us understand the performance of our website and how we can improve the website experience for our users. Some of these may be set by third parties we trust, such as Google Analytics.

            They may also be used to personalise your experience on our website by remembering your preferences and settings.

            Marketing cookies

            These cookies are used to improve and personalise your experience with our brands. We may use these cookies to show adverts for our products, or measure the performance of our adverts.