Inside the industry: UK automotive deserves more support

So big and so far reaching is the British car industry in the fabric of our nation that it is hard to be concise when singing its praises, so forgive me for the ensuing stat attack while I try to do justice to it and its hard-working employees across retail, manufacturing and the sprawl of head offices and suppliers linked to those disciplines.

Let’s start with retail, the beating heart of the industry. The latest figures from the National Franchised Dealers Association estimate that (pre-Covid) 590,000 people work in automotive retail, generating £2.4 billion in net capital expenditure, with businesses turning over around £200bn a year – £150bn from car sales alone.

Then there’s manufacturing, which, the Society of Motor Manufacturers and Traders estimates, employs 168,000 people directly – with about double that number working around it. Turnover is valued at £82bn a year, while it accounts for around 14% of the total value of exported goods from the UK each year, at £44bn. R&D spend is £3.75bn – and great for future jobs.

All big numbers, and all made even more significant when you start to layer in extra detail as to what all this activity means for the nation’s coffers, which are some way beyond breaking point right now.

The latest estimates from the European Automobile Manufacturers’ Association (ACEA) suggest the UK’s annual tax income from automotive totals £49bn. That’s made up of £12.6bn of VAT on sales of cars, parts and servicing, £6.6bn of annual ownership taxes, £28.3bn from the sale of fuels and lubricants and £1.5bn from other sources. In Europe, only Germany, France and Italy sit ahead of us.

For all its faults, UK automotive has proven to be a resilient business that can be depended on to keep on giving. Sure, the recovery from the 1970s collapse took time, but recover it did, bit by bit – to record levels in retail in March 2017 and, almost, pre-Brexit vote, pre-emissions scandal and the like, to hitherto unseen levels of production. Pertinently, the 2008-09 financial crisis was but a blip. Who’d argue that UK automotive is anything other than a big, brilliant business?

The Germans get that. It’s why they launched a £4.4bn incentive scheme to support their industry through the Covid crisis and protect its £84bn tax income. The French get that. It’s why they launched a £7.1bn package to support their industry through the Covid crisis and protect their £75bn tax income. To date, the UK government has “no current plans” to do anything beyond promote its pre-existing electric car incentives.

READ MORE

Inside the industry: Firms can still thrive in these tough times 

Special report: Covid-19 and the future of the UK car industry 

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