Examination of Witnesses (Questions 131-139)
MR PAUL
WILLIAMS
20 MAY 2009
Q131 Chairman: Welcome. We have met informally
in the past but I think this is the first time you have given
formal evidence under my chairmanship. Can I ask you to introduce
yourself, please?
Mr Williams: Yes. I am Paul Williams.
I am Chairman of the Retail Motor Industry Federation which represents
the retail arm of the industry. Representing over 8,000 bodies
it is an industry that has 60,000 businesses and 580,000 people
employed within it. In terms of its size it has twice the number
of employees that the manufacturers have and contributes £33
billion a year to the Treasury in the form of taxes, so quite
a large segment.
Q132 Chairman: It would be helpful
to know your personal involvement in the industry.
Mr Williams: I am here as Chairman
of the RMIF but I am personally the non-executive chairman of
a large dealer group.
Q133 Miss Kirkbride: A very, very
important sector. This week we have seen the introduction of the
Car Scrappage Scheme and I wonder if you think that is the answer
to the problems of your retail sector at the moment?
Mr Williams: No, I do not. It
was never meant to be the panacea for the industry. I introduced
it as an idea in November to Lord Mandelson when he came to see
both the manufacturers and retailers. The scheme that I outlined
to him that has since gathered momentum in various trade bodies
was that there should be a contribution of £2,000 from Government
and it should include nearly new cars, which are effectively demonstrator
cars which are the same as new cars in terms of the advantages
it would have. The aim of the scheme is to reduce the possibility
of downsizing within the manufacturing industry and the retail
industry so that we could possibly save some jobs. If there was
an increase in sales then we could hopefully save some more jobs
both in manufacturing and retailing. When the scheme actually
came to fruition, and having accepted the concept it has taken
rather a long time to come in, almost a week before the Budget,
maybe even hours before the Budget, it was watered down to £1,000
from the Government and £1,000 from the manufacturers. The
hope was that were it £2,000 from Government the manufacturer
would put £1,000 in or thereabouts, and therefore it would
be far more exciting to the consumer. I am somewhat mystified
that it was watered down and, I have to say, somewhat disappointed.
It will have an effect, and it has already had an effect. It has
been a long time since any dealership in this country has had
customers ringing them asking if they can come in and see them.
I can categorically assure you that is not common. It has worked,
but it is mystifying as to why instead of just taking the German
scheme the decision was to reinvent the wheel. It was never intended
to be the panacea. It has given a lift to the industry and it
will continue to give a lift to the industry, it is just a little
mystifying as to why it was changed.
Q134 Miss Kirkbride: Did you know
that they were going to have the German scheme to begin with?
Had you got it on good authority? Do you have any idea why it
was changed, as you say, within hours or days of the Budget?
Mr Williams: I do not.
Q135 Miss Kirkbride: What is your
speculation on it?
Mr Williams: One of the points
Paul Everitt made was that the BERR Auto Unit had to second some
people in there to get the scheme together, the actual process.
I believe it was the Treasury, and I do not know this, I have
no more knowledge than you do of this, that actively watered it
down somewhat, which still gives us something we can go to market
with but it is just a shame that it did not get a little bit extra
and, as Mr Hoyle has pointed out, had a structured tier to it
so it is not just middle and smaller volume products that get
going.
Q136 Miss Kirkbride: You do say that
the good news is that the phones have started ringing since it
was introduced.
Mr Williams: Yes.
Q137 Miss Kirkbride: Can you give
us more evidence as to what has happened and the quality of what
has happened with its introduction this week?
Mr Williams: I just happen to
know because of various contacts I have got. My own company has
been incredibly busy.
Q138 Miss Kirkbride: Incredibly busy?
Mr Williams: Yes, incredibly busy.
Our Hyundai dealerships are reported to be working seven days
a week, they have to come in on Sundays to cater for the sales.
They have products at the lower end of the market. They have some
luxury saloons as well but predominantly it is the lower end of
the market.
Q139 Chairman: Is this enquiries
or sales we are talking about?
Mr Williams: Actual sales. To
deal with the enquiries and they are selling more and more product.
Bear in mind, it was only introduced officially and we could only
release cars on Monday and even that got jeopardised somewhat
for 48 hours, but nevertheless that is now happening. I know my
own company had a great number of vehicles ready for release that
we could not actually release because of the various manufacturers
involved. Actual sales have been made. These are incremental sales,
which is important.
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