The UK’s auto industry trade association, the SMMT, has called for UK government action to support the automotive sector. The move follows sharp declines in the UK vehicle market in recent months as well as production cutbacks at UK car plants.


The Society of Motor Manufacturers and Traders (SMMT) and the Retail Motor Industry Federation (RMIF) have sent a joint letter to the chancellor, The Rt. Hon Alistair Darling MP, and business secretary, Lord Mandelson, regarding the impact of the current economic crisis on the UK motor industry.


The letter suggests a number of initiatives, designed to stimulate the UK vehicle market and mitigate the short and long-term effects of the economic downturn throughout the sector, from supply chain to retail and to ensure UK automotive manufacturing remains an efficient and effective global player.


The proposed measures include:



  • Allowing manufacturers’ finance companies access to the funding available to banks through the special liquidity arrangements. This would allow them to support customers and their franchise networks.
  • Scrapping plans for increased VED and new first year rate. This would provide a strong signal to buyers and help to improve residual values.
    Increased capital allowances for fleet buyers, particularly for buyers of commercial vehicles, to stimulate immediate demand.
  • Shelve plans for reform of business car capital allowances, as overall impact and timing is unhelpful.
  • Remove expensive car restrictions under capital allowances to help demand for UK higher end manufacturers.

And, manufacturing support to include:



  • National arrangements to allow manufacturers and suppliers access to loan facilities, including potential government guarantees, to maintain liquidity and investment.
  • Help to speed up the allocation of existing funding to support training,R&D projects and energy efficiency measures. This would help upskill employees, accelerate innovation and provide an immediate stimulus for green collar jobs.

“The motor industry faces a set of unprecedented market conditions. The dramatic falls in demand for new vehicles in the UK, Europe and around the world, combined with the limited availability of funding and liquidity now puts at risk valuable industrial capability. Urgent action is required to boost demand for new vehicles and ease pressure on UK automotive suppliers,” said Paul Everitt, SMMT chief executive.  “The pre-Budget report should set out the strategy and measures needed to restore consumer confidence and support valuable industrial capability during this difficult period.”


Paul Williams, RMIF Chairman said: “It is vital that the motor industry presents a united front at this time. These measures and others, jointly presented by the two industry trade associations, would go some way to helping the revival of consumer confidence in our sector. We urge the chancellor to undertake these
measures, and to discuss further action with us if necessary.”