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NFDA urges Government coronavirus plans to protect car retail sector

NFDA director, Sue Robinson

The National Franchised Retailers Association (NFDA) has urged Government to introduce fiscal measures to protect the automotive retail sector from the impact of COVID-19 coronavirus.

In a letter to the Chancellor of the Exchequer, Rishi Sunak, and Alok Sharma, the Secretary of State for Business, Enterprise and Industrial Strategy, the NFDA urged the Government to support franchised retail and its 590,000 employees during the outbreak.

Spelling out the case for support, NFDA director, Sue Robinson, said: “The retail automotive sector employs 590,000 people in the UK and businesses must be protected through supportive fiscal measures during the outbreak of the Coronavirus.”

The NFDA made a series of recommendations amid concerns that the Government is only targeting support at one group of businesses, small to medium enterprises (SMEs), with a break in business rates and a vow to reimburse smaller businesses sick pay expenses among the measures announced in last week’s 2020 Budget.

The NFDA said that franchised vehicle retailers pay very high levels of business rates and operate on much tighter margins than most SMEs, with an inherent high fixed costs exposure including rent, business rates, VAT and wages.

As a result, it recommended that:

  • Temporary business rates relief be extended to all retail businesses, regardless of their rate bill.
  • The British Business Bank be authorised to extend the Coronavirus Business Interruption Loan Scheme to any retail business, regardless of size.
  • Statutory Sick Pay (due to Coronavirus) relief should be provided for the first two weeks to all retail businesses, regardless of size.

Robinson said: “The impact of the virus is going to be felt across every part of the economy and especially in the retail sector. 

“Revenues from vehicle sales and services will not only be impacted by the introduction of social distancing measures, but also by the widespread shutdown of European car and parts manufacturing.

“There is a real danger that if the Government is only targeting support at one group of businesses (SMEs), some big businesses will fail, causing business interruption in any case for SMEs that contract with them.

“The automotive retail sector needs to be protected regardless of size.”

Robinson said that the NFDA would welcome the opportunity to further discuss with the Government the severity of the financial challenges that franchised vehicle retailers are facing.

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