Automotive industry seeks extra support

The Motor Trade Association (MTA) is calling for more government support for the automotive industry and extra inspections to make sure businesses are abiding by Covid-19 regulations.

Senior figures from a range of automotive organisations and businesses have worked closely with government officials in recent weeks in an attempt to minimise the impact of the coronavirus outbreak on the economy.

With restrictions on businesses to ease further when the nation moves to alert level two, such talks are now looking at long-term issues for the industry.

At the same time, VIA (the Imported Motor Vehicle Industry Association) is predicting demand for vehicles may be higher than previously expected and lead to a potential shortage of stock.

Greig Epps, advocacy and strategy manager at the MTA, says level two will hopefully see more customers visiting businesses “but that is still the big unknown”.

“There’s been some good activity up until now, after coming out of lockdown, and as we keep going, we’ll see the effects of people who have lost jobs and see how that activity is maintained,” he adds.

“That’s why the MTA and other associations are having conversations about how government can stimulate the automotive sector – be it through subsidies for vehicle types or other measures – and help this part of the economy survive. 

“It’s important to see if we can find ways for the industry to be supported.”

Epps, pictured, says the level two rules outlined by the government on May 7 should make it easier to do business but companies will still have to maintain standards around social distancing, cleaning requirements and contact tracing.

He adds that additional inspections or audits from government officials would be beneficial to clarify the rules and to ensure businesses abide by them.

“The rules are as clear as they can be at the moment but we need authorities to come through and say yes to one thing or no to another,” Epps explains. 

“We almost need a referee to come in so we know where the line is on what businesses can do. 

“WorkSafe are out there doing spot audits and several businesses throughout the auto sector have been approached and have had their hands slapped but many have been told they’re doing the right thing and doing okay.

“The government has given its broad outlines and industry representatives have tried to provide guidance to put those in place. Businesses are now doing their thing and starting to operate and we can only wait for inspections, audits or public reporting, which will lead to businesses being brought into line, if necessary, through peer pressure or official action.”

Automotive demand

The MTA says a survey of nearly half of its members shows many of them have seen demand for their services at alert level three at normal or higher levels than pre-lockdown.

Epps says some of that may be pent-up demand of people wanting a new car or needing to get things fixed on vehicles after a month of lockdown, but he hopes the eventual shift to level two will bring in more customers for members.

“We have heard good things from dealers and repairers in terms of activity recently and a lot of them are busy,” he explains.

“At level three businesses aren’t going to get great numbers of people coming through. But if they are operating at level three with good safety procedures and track-and-trace measures, then the move to level two is really just about the freedom for the customers to come in and interact with them more.”

Epps adds one of the challenges for companies is customers not always thinking about things such as distancing when they are on site. He says while this has caused frustration for a number of businesses, it is up to them to establish clear guidelines for the public.

“A lot of questions we have been getting from our members have been practical ones and there’s been issues of how we stop people walking onto lots.

“The MTA provides guidance to the industry based on the government guidelines but it comes down to each individual business looking at their layout and how things can work,” Epps says.

“The concerns and frustrations are part of us learning how to do business in a new way. This is new for everyone and we’re just figuring out how to operate with these guidelines.”

‘Cautious optimism’

VIA is refining its recommendations around standards and procedures following the government’s announcement on what limits there will be at level two.

A task force of about 20 people put together by VIA met on May 7 to discuss the details of the lower alert level and to review trading for the industry at level three.

David Vinsen, chief executive of VIA, says the mood in the industry at the moment is one of “cautious optimism”.

“The good news is cars are being sold and the level of enquiry is strong,” he explains. 

“We also think we may come out of this Covid-19 situation more quickly than previously expected. Rental cars coming back into the market may not come back in the worst possible way because distributors are buying them back and not just dumping them on the market.

“We have plenty of stock at the moment but if sales take off then we have got little stock coming in and we’re likely to end up with a shortage of vehicles.

“We think there’s going to be reasonable demand for cars and upward pressure on prices because of the shortage of stock.”

Vinsen also urges businesses across the automotive industry to make sure they follow the rules on trading laid down by the government. 

“Once we’re at level two we do not want to go back to level three, so we want everybody to do the right thing and play the game in terms of personal hygiene, social distancing procedures and protocols on the yards.”