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UK car production will drop by 95% in May and there will be no scrapping scheme

In May, around 5,300 cars were produced in British factories, compared with 116,000 in the same month a year ago, industry latest figures have confirmed.

Car manufacturing declined 95.4 percent last month, with car factories “ severely held back by social distance requirements and reduced demand, ” said the trade organization, Society of Motor Manufacturers and Traders.

With auto output dwindling, Britain’s car sales lagging far behind the rest of Europe and one in six jobs in the sector at risk, industry has enlisted support from ministers.

However, government officials say a scrapping scheme – which lowers the price of new vehicles when a motorist trades in an old one – will not be launched to breathe new life into the auto industry.

Production cut continues: Last month, slightly more than 5,000 new cars were built at factories in the UK, as social distance measures and lower demand brought production to its lowest level in 74 years.

Production cut continues: Last month, slightly more than 5,000 new cars were built at factories in the UK, as social distance measures and lower demand brought production to its lowest level in 74 years.

A low number of 5,314 vehicles will roll off production lines in May 2020, according to figures released by the SMMT last week.

While output was higher than in April – when only 197 cars were built, but with factories still closed or running at a reduced capacity – it was still the worst in May since 1946, records show.

While the majority of British car manufacturers – about two thirds – had resumed output last month, the necessary post-corona virus measures meant that production was limited.

Demand also remained relatively low, as major world markets had only just reopened after a lockdown.

Car production in May fell by a staggering 95%, despite two thirds of British car factories restarting production during the month.  It is the worst performance in May since 1946

Car production in May fell by a staggering 95%, despite two thirds of British car factories restarting production during the month.  It is the worst performance in May since 1946

Car production in May fell by a staggering 95%, despite two thirds of British car factories restarting production during the month. It is the worst performance in May since 1946

Four of the five cars built in the UK (4,260 models) were exported in May, mainly to the EU, the US and China.

As the UK auto showrooms reopened on June 1, only 1,054 models were built for domestic buyers last month.

Calls for the ban on sales of new gasoline, diesel and hybrid cars to be accelerated to 2032 – including motorcycles

The Climate Change Committee (CCC) has called on Transport Secretary Grant Shapps to “accelerate” the ban on the sale of new gasoline and diesel cars from 2035 to 2032.

The independent body, consisting of politicians and scientists, called on ministers foresee “detailed policies” to accelerate the ban by three years – as well as a ban on the sale of new motorcycles with internal combustion engines.

Shapps has already suggested that the restriction on sales of new gasoline, diesel and hybrid vehicles may come sooner than outlined.

Speaking as a guest on BBC Radio 5 live in February, he said the ban would take place by 2035 “or even 2032” before saying there would be talks before a decision is made.

The CC has also said excise duties on vehicles system should be adapted to give people a greater incentive to buy zero-emission vehicles.

Pure electric cars are already exempt from paying first-year VED and standard rate.

Chancellor Sunak also confirmed in the latest budget that new electric cars are now also exempt from the expensive car tax, which is applied to all gasoline, diesel and hybrid vehicles with a list price of over £ 40,000. Owners of these cars are required to pay £ 325 for the first 5 years of the standard rate.

That means reforms of the VED will make combustion engine cars even more expensive than it is today.

The CCC report said, “Commercial vehicle tax reforms, in addition to purchase subsidies and preferential tax treatment, are a strong incentive for consumers to buy low-carbon vehicles.

“More could be done with vehicle excise taxes to boost incentives for all buyers and discourage the most polluting vehicle purchases.”

This means that British factories produced 324,763 cars in the first five months of 2020, a 42 percent decrease from the same period in 2019 and a loss of over 230,000 units.

As a result, the SMMT has reduced its full-year estimate to less than one million UK-made vehicles by 2020.

The figures have been released in the shadow of the trade organization, which claims that one in six jobs in the sector is likely to be made redundant as soon as the government correction for jobs in the government expires in November.

Chief executive, Mike Hawes, said, “May’s numbers are further evidence of why the UK industry, like its global rivals, needs dedicated support to make a successful reboot.

Government support has been crucial so far to keep many companies afloat, but the job is not done.

Measures to stimulate cash flow, including additional and tailor-made financing arrangements, tax cuts and deferral of corporate rates, would yield immediate results when liquidity is most acute.

“We must maintain the industry’s highly skilled jobs, but also ensure that business conditions are competitive so that we can unlock the investment that will fuel the long-term recovery – a green recovery – inextricably linked to the success of the sector.’

The SMMT welcomes the government’s commitment to negotiate “turbocharging” negotiations to conclude a comprehensive free trade agreement with the EU by the end of the year.

However, according to the latest reports, the government will not introduce turbulence in the sector with a scrapping scheme.

The SMMT has communicated with Chancellor Rishi Sunak about the effectiveness of a scheme similar to that launched in 2009 to help the auto industry recover from the financial crisis.

And it has been widely reported that Boris Johnson is considering a targeted electric car scrapping agreement, which offers up to £ 6,000 off the price of a new zero-emission car if motorists trade an older, polluting gasoline or diesel car.

However, government officials said the prime minister has “no current plans” to introduce a settlement after the pandemic.

A government spokesman said Auto Express: ‘We currently have no plans to change the existing incentives or introduce a scrapping scheme.

“We are committed to building a greener transportation system and reducing CO2 emissions to reach our net zero goal by 2050.”

The news comes when the industrial organization Make UK warned that British production will not recover from the coronavirus crisis until 2022.

The industry could take a hit of £ 36 billion this year at worst, as investment plummets and demand for many products grinds to a halt, hitting car manufacturers hardest.

Renault’s Clio was the most purchased car in Europe in May – and the UK market has not recovered as quickly as other EU countries, the report found

With UK car dealers only getting the green light on June 1, the UK suffered the largest drop in registrations in May than any other EU country, according to extensive market figures.

New model sales fell 89 percent in the UK last month – the biggest drop in Europe, as shown in the table below.

By comparison, registrations in Slovenia, Belgium and Austria were back only a third, while other difficult markets, including Italy, France and Spain, all rebounded stronger than the UK.

However, the gap between the UK and the rest is expected to close in June, with showrooms from the beginning of the month welcoming customers after a blockage.

Felipe Munoz, a global car market analyst, explained, “The number of registrations [in Europe] more than doubled in May compared to April figures.

Despite the positive signs of recovery, some of these records may reflect sales made prior to closing; therefore we still do not have enough information to predict whether Europe will experience a ‘V’ or a ‘U’ recovery. ‘

Jato Dynamics, which complies with registration data for all European countries, said the Renault Clio became the most-sought-after new car in May, overtaking the regular flagship VW Golf.

The Renault Clio became the best-selling new car in Europe in May 2020, overtaking the VW Golf at the top of the rankings

The Renault Clio became the best-selling new car in Europe in May 2020, overtaking the VW Golf at the top of the rankings

The Renault Clio became the best-selling new car in Europe in May 2020, overtaking the VW Golf at the top of the rankings

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