SMMT March numbers do not reflect extent of lockdown damage – KPMG

Analysts have warned that the dire effects of the COVID-19 pandemic on car production are not fully reflected in the March figures, released today by the Society of Motor Manufacturers and Traders. Andrew Burn, partner and head of automotive at KPMG UK said that while the March data shows that conditions were difficult, April’s numbers will show the full extent of the effects of the UK lockdown on the sector.

Burn said: “Although the numbers show that it was a challenging month for the sector, lockdown in the UK did not start until 23 March, so they really only reflect a three week period. Whilst the figures show the gravity of the impact of COVID-19, they are likely to be substantially better than the results we will see for April’s production levels when those figures are released.

“The silver lining at present lies in exports, most notably to China, as sales have started to come back. We are already starting to see some production restarting in Germany and the UK’s carmakers are working on their own plans to restart production. However, I anticipate we will see a soft restart with only certain models being focused on initially, and at much reduced volumes to those we were seeing before the crisis. This will be driven partly by demand and partly by the impact of social distancing measures being required in the production facilities in order to remain compliant with the new HSE guidelines.  The key questions, however, are whether a prolongation of the UK lockdown will delay restart plans and also the extent to which challenges in the supply chain will affect vehicle production.

“I strongly believe that collaboration is key to getting the sector back on a sturdy footing. Industry and government need to be working together, within the confines of antitrust laws, to ensure the level of disruption, particularly from supply chain, is minimised.”