Office of National Statistics (ONS) data shows that 92% of automotive businesses in the UK were trading by the second half of June.
Analysis of the data by the Institute of the Motor Industry (IMI) illustrates the determination of sector to get back on its feet, with 19% reporting an increase in turnover
According to the ONS data, just 5% of organisations with a workforce of more than 250 are still temporarily closed, compared to 10% of those with a workforce of less than 250.
Approximately 62,000 jobs returned to work from furlough in the second half of June; an additional 19,700 are planned to return in the first 2 weeks of July. Around 219,000 automotive jobs remain on furlough, however.
Steve Nash (pictured), CEO of the IMI said: “It is tremendously encouraging to see how determined our sector has been in getting back on its feet since the June 1 opening of showrooms. Our previous report showed tentative signs of recovery but the latest data suggests that automotive businesses really grasped the nettle in the second half of June.
“Just 8% had not reopened and 62,000 jobs returned to work from furlough. But with only just over a third saying that cash reserves would last for more than six months, it’s clear that balancing cashflow remains a challenge.”
The data reveals that 19% of automotive businesses reported an increase in turnover but 60% reported a decrease. Also, 6.1% said that they either had no cash reserves or less than a month, potentially putting 5000 businesses at risk.
Dealers looking for help on cashflow may find the IMI’s recent Cashflow Clinic webinar useful. Designed for automotive retail businesses of every size – from sole traders and SME owners to managers with P&L responsibility in medium-sized and larger businesses – Andrew Burn, partner and head of Automotive at KPMG and Simon James, CFO addressed the urgent business finance and cashflow questions facing many organisations.
“The latest data certainly should give some cheer”, added Nash. “However, the big concern remains about the long-term impact on the skill-set of the sector. We have continued to lobby government to look at ways to ensure that skills and training are supported going forward and hope that tomorrow’s Chancellor’s statement provides good news, not just for the automotive sector but right across business and industry.”