Automotive repairs sector responds to Chancellor’s Budget

Small business support measures welcomed

Automotive repairs sector responds to Chancellor’s Budget
Image: Bigstock.

The automotive sector has broadly welcomed Rishi Sunak’s Budget delivered at the House of Commons earlier this week.

The Independent Garage Association (IGA) has thanked the Chancellor for responding to our request to continue the Retail Business Rate Relief Scheme into the 2021/22 tax year.

Stuart James, chief executive of the IGA said: “There are hard times ahead for independent garages.

“A significant decline in MOT work is expected from April to June, where motorists took advantage of the MOT extension last year.

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“Garages have also experienced lower volumes of servicing and repair work over the past year due to motorists making fewer journeys.

“Extending the furlough and business rate relief schemes will provide the financial assistance needed to help independent garages through this upcoming difficult period, so they can continue their essential work keeping vehicles in their local communities safe and roadworthy.”

Andy Hamilton, CEO of LKQ Euro Car Parts, said: “Today’s Budget has given the independent aftermarket some reasons to be cheerful after a long and tough year.

“The extension of furlough until September was a welcome surprise.

Related: E10 petrol to be introduced at pumps from September

“It will give garages time to get back on their feet after restrictions hopefully come to an end in June, avoiding a possible cliff edge event.

“Importantly, it will allow the garages that will lose volumes of usual MOT work through April to July to cushion the gap and prepare for the new demand curve that we’ve seen through the later months of the year.

“The new small business corporation tax rate, business investment tax relief and funding for digital training all also have the potential to be really promising for the industry’s SMEs.

“Support for apprenticeships and traineeships is also hugely positive and cannot come soon enough.

“The lasting scars from the pandemic are likely to come in skill shortages as the usual cohort of fresh talent joining the sector every year more or less dried up because of the pandemic, with colleges also struggling to deliver courses.

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“With the aftermarket leaning into some transformational changes over the next few years – from increasing digitisation to the rapid growth of the hybrid and EV parc – it will need all the support it can get to make up lost ground.

“It’s rarely the case that garages need an incentive to take on apprenticeships.

“The aftermarket is one area of the economy where the practice has been embedded into everyday business for decades. But they do need funding when workloads remain suppressed from their pre-pandemic levels.”

RAC head of policy Nicholas Lyes said: “Drivers will breathe a sigh of relieve that the Chancellor has decided not to ‘rock the fuel duty boat’.

“We feared this would only pile further misery on drivers at a time when pump prices are on the rise and many household incomes are being squeezed as a result of the pandemic.”

Related: MOT demand remains unclear for peak months of March and September

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