92% of automotive businesses open by the second half of June
Analysis of new ONS data by Institute of the Motor Industry illustrates determination of sector to get back on its feet, with 19% reporting increase in turnover
The Institute of the Motor Industry (IMI) which is the professional body for individuals working in the motor retail sector - a sector which in 2019 comprised 620,000 jobs in 95,000 establishments covering 167 occupations - has analysed the latest ONS data1 on UK business performance.
- By the second half of June, 92% of automotive businesses were trading
- 8% of businesses reopened, equating to approximately 7,500 businesses
- 4% (3,300) plan to reopen in the first 2 weeks of July
- 3% of organisations with a workforce of greater 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
- Approximately 219,000 jobs remain on furlough
- 19% of automotive businesses reported an increase in turnover but 60% reported a decrease
- 35% of automotive business said that their cash reserves would last more than 6 months – an increase of 4% since last reporting
- 6.1% said that they either had no cash reserves or less than a month, potentially putting 5000 businesses at risk
Steve Nash, 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 1st 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 6 months, it’s clear that balancing cashflow remains a challenge.”
Dealers looking for help on cashflow can download the IMI’s recent Cashflow Clinic webinar. 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 & Head of Automotive, KPMG and Simon James, CFO addressed the urgent business finance and cashflow questions facing many organisations.
“The latest data certainly should give some cheer”, concluded Steve 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.”
1 ONS Data for the period 15th to 28th June 2020