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NFDA urges Government to support automotive retailers during Coronavirus outbreak

NFDA 17/03/2020

“The retail automotive sector employs 590,000 people in the UK and businesses must be protected through supportive fiscal measures during the outbreak of the Coronavirus”, said Sue Robinson, Director of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers in the UK.

Today, 17 March 2020, NFDA wrote a letter to the Chancellor of the Exchequer, the Rt Hon Rishi Sunak MP and Alok Sharma, Secretary of State for Business, Enterprise and Industrial Strategy, to urge the Government to support franchised retailers during the outbreak of the Coronavirus.

NFDA is concerned that the Government is only targeting support at one group of businesses, small to medium enterprises (SMEs). NFDA outlined that franchised vehicle retailers pay very high levels of business rates and operate on much tighter margins than most SMEs, with an inherent high fixed costs exposure including rent, business rates, VAT and wages.

As a result, NFDA recommends that:

  • Temporary business rates relief be extended to all retail businesses, regardless of their rate bill
  • The British Business Bank be authorised to extend the Coronavirus Business Interruption Loan Scheme to any retail business, regardless of size
  • Statutory Sick Pay (due to Coronavirus) relief should be provided for the first two weeks to all retail businesses, regardless of size.

Sue Robinson added, “The impact of the virus is going to be felt across every part of the economy and especially in the retail sector.  Revenues from vehicle sales and services will not only be impacted by the introduction of social distancing measures, but also by the widespread shutdown of European car and parts manufacturing.

“There is a real danger that if the Government is only targeting support at one group of businesses (SMEs), some big businesses will fail, causing business interruption in any case for SMEs that contract with them. The automotive retail sector needs to be protected regardless of size.

“NFDA would welcome the opportunity to further discuss with the Government the severity of the financial challenges that franchised vehicle retailers are facing”.

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About the RMI

The Retail Motor Industry represents the interests of operators in England, Wales, Northern Ireland and the Isle of Man providing sales and services to motorists and businesses. The RMI has a formal association with the independent Scottish Motor Trade Association which represents the retail motor industry in Scotland.