A new scheme launched by the Society of Motor Manufacturers and Traders could provide a crucial shot in the arm to an ailing in industry.
In a year when the global pandemic has hit sales and the threat of a no-deal Brexit has caused uncertainty on production levels and supply chains, the SMMT’s Safe Harbour scheme will allow automotive companies to collaborate without breaking anti-competition rules.
Car production has dropped by 40.2 per cent in 2020, representative of 348,821 compared to the same eight month period in 2019, a financial blow of £9.5bn to the industry.
The crucial supply chains in the industry are built to provide parts to just-in-time manufacturing techniques, which means that if there is any turbulence in the chain then companies can hit major production problems. The Safe Harbour scheme will open up supply chains across the industry to ensure any impact is lessened.
“Inevitably, these pressures are going to take their toll on businesses, so the Safe Harbour Scheme has been created to help any suppliers in trouble,” said SMMT chief executive Mike Hawes.
“It should provide valuable breathing space as the sector restarts and business and consumer confidence recovers.
“Ultimately, however, the industry must maintain its competitiveness to grow, and for that we still look to the government to deliver an ambitious trade deal with the EU.”
Jaguar Land Rover are one of the many big names to sign up to the scheme with Judith Richardson, global purchasing director warning that it will need the support of the government for it to work properly. She said: “The nationwide UK automotive supply chain has been built over many years thanks to huge business investment and support from successive governments.
“It remains highly competitive, with world-class facilities and a productive and highly skilled workforce.
“This cannot be taken for granted, however, and the Safe Harbour Scheme, combined with appropriate government support, will be essential to ensure automotive businesses can continue during these extremely challenging times and help drive a green recovery for Britain.”