Memorandum submitted by the Retail Motor
Industry Federation (RMIF)
REVIEW OF THE IMPACT OF THE GOVERNMENT'S
AUTOMOTIVE SUPPORT PACKAGE
The Retail Motor Industry Federation (RMIF)
would like to take this opportunity to present the views of its
members at your forthcoming session to review the Government's
recently announced Automotive Support Package.
The retail motor sector is one of the most important
business sectors in the UK economy, and the RMIF is the UK's leading
trade association for the industry. Its objective is to promote
and protect the views of retail businesses within the automotive
industry, one of the largest industrial sectors in the UK. The
annual turnover of the UK retail motor industry is £14 billion
and it employs 570,000 people in 70,000 businesses. Annually the
industry raises £33 billion in tax revenue.
Currently the Government support for the automotive
sector has aimed exclusively at the manufacturing sector. This
sector has expanded output considerably in recent years as demand
for new vehicles has increased. Demand has fallen by over 30%
year on year and manufacturing output has also fallen by 50% year
on year and thus the industry faces acute problems with both over
production and economic viability. At the same time it is vital
for the UK economy to retain motor manufacturing base in UK.
Up until recently most discussions with Government
discussions overlooked the need to sell cars and light vans. Unless
the retail network of Franchise Dealers can stimulate demand for
new vehicles there will be no relief for the manufacturers. Until
now, over two million new cars have been sold annually in the
UK thus reflecting the success of the sector.
The RMIF first proposed a "scrappage"
scheme personally to the Secretary of State for Business Enterprise
and Regulatory Reform (BERR) in November 2008. We have consistently
lobbied Government on this issue, in particular to BERR and HM
Treasury. The Chancellor announced in the Budget on 22 April 2009
that a scrappage scheme will be introduced in May 2009. This is
a long overdue recognition of the importance of the retail motor
sector to the health of the UK vehicle industry.
The RMIF would welcome an opportunity to appear
before your Committee to set out the importance of the retail
sector within the automotive industry. In my opinion it is folly
for any Government to look at manufacturing in isolation when
considering just how the industry should be supported now and
in the future.
April 2009
| 
