Car retail groups with revenues of up to £500 million are now eligible to apply for funding from a new version of the Government's Coronavirus Business Interruption Loans (CBIL) scheme in a bid to drive support during the COVID-19 lockdown.
Chancellor of the Exchequer, Rishi Sunak, announced this morning (April 3) that the new scheme, referred to as the Coronavirus Large Business Interruption Loan Scheme (CLBILS), will offer government-backed loans of up to £25m to firms with revenues of between £45m and £500m.
A previous stipulation that the loans were only available to firms that had been turned down for a commercial loan from their bank - resulting in interest rates of as much as 30% - has been removed from the eligibility criteria for the new scheme.
The CLBILS should tackle the so-called ‘squeezed middle’ businesses not covered by the original measures and provides a government guarantee of 80% to loaning banks.
Loans backed by the guarantee will be offered at commercial rates of interest, but the government will not cover interest or fees in the same way as the small business scheme, AM understands.
As part of the new scheme, Government has also banned banks from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000.
Business secretary Alok Sharma said the changes to the scheme would make it easier for firms to access loans after it emerged that just 1,000 of the 130,000 loan applications submitted to date had been approved.
Chancellor, Rishi Sunak, said: "We have also listened to the concerns of some larger businesses affected by Covid-19 and are announcing new support so they can benefit too."
Sunak insisted that Government was “making great progress on getting much-needed support out to businesses to help manage their cashflows during this difficult time” with millions of pounds of loans and finance being provided to hundreds of firms across the country.
But he added: "I am taking further action by extending our generous loan scheme so even more businesses can benefit."
Responding to the Government’s changes to its CBIL eligibility guidelines today, UHY Hacker Young's head of automotive, David Kendrick, said that the move had followed lobbying from industry bodies such as the RMIF and many SME businesses with turnover in excess of the initial £45m threshold for CBILs.
The National Franchised Dealers Association (NFDA) was also quick to urge Government to extend the CBIL scheme to larger businesses, addressing the issue ahead of the full lockdown of non-essential retail businesses mid-way through last month.
“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 NFDA director Sue Robinson.
She added: “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”.
Marshall Motors and Vertu Motors bosses Daksh Gupta and Robert Forrester have recognised the efforts of their car retail workforce to support the NHS and other key workers during the coronavirus lockdown period.
Marshall Motor Holdings will keep 62 of its aftersales operations open across the UK in an effort to support the emergency services, commercial vehicle operators and key workers during the COVID-19 coronavirus outbreak.
Days after fellow AM100 car retail group boss, Vertu Motors chief executive Robert Forrester, suggested his business was re-assessing its initial shutdown of all sites to support those still requiring aftersales support, Marshall confirmed the full scale of its aftersales re-opening.
But in the later clarification on the issue of workshop re-openings, he said: “With the support of Marshall aftersales colleagues across the country, we are delighted to share that 62 aftersales operations of its car, van and truck franchises covering 21 brands across 19 counties (including six trade parts specialist operations) will remain open to provide breakdown services and vital maintenance for the emergency services, commercial vehicle operators and key workers whose jobs and transportation needs are vital to public health and safety at this time.”
Gupta added: “We are immensely proud of our dedicated aftersales colleagues who want to ensure that the vehicles of those people and organisations on which the country is relying on more than ever, stay mobile and safe.
“During this period, there will be enhanced health and safety measures on these sites which will be observed by both our colleagues and our customers. Our colleagues’ and customers’ safety is of paramount importance.”
In a video interview last week, Robert Forrester urged Vertu staff which had been categorised as “furloughed” under the Government’s Coronavirus Job Retention Scheme to volunteer to help the NHS.
He said: “We have people who are great drivers, they have great personal skills and frankly many of them don’t want to be sat at home with nothing to do.
“It’s not without risk but those are risks that some of our people are willing to take.”…
Leeds City Council has joined Birmingham City Council in asking the Government to delay implementing its clean air zone (CAZ), which was due to go live on September 28.
The request was outlined in a joint statement issued by the chief executive of Leeds City Council, Tom Riordan and the council’s leader, Councillor Judith Blake.
They said: “We have asked the government for permission to delay the implementation of the clean air charging zone until further notice and we have suspended repayments for taxi and private hire owners who have received an interest-free loan.
“We are still accepting and continuing to pay grant payments for those vehicle owners switching to cleaner vehicles.”
From the September, it had planned to charge buses, coaches, heavy goods vehicles, taxis and private hire vehicles, which failed to meet minimum emissions standards will be charged for driving within the zone’s boundary…
PSA Group UK's Citroen, DS Automobiles and Peugeot brands are planning around a 96% decline in new car sales during the UK's COVID-19 coronavirus lockdown, managing director Alison Jones has revealed.
Jones, who is responsible for the French brands' UK operations, warned that a decline in the UK new car market of around 30 to 40% down during March is “masked by the fact that the industry had a good start to the month” during an exclusive interview this week.
“If you look at what's happening in some of the other countries that have gone into lockdown the industry stats show that day by day they're locked down the market is down 96% because they're dealing with the health crisis so we have to plan for that, that's on a day-by-day basis,” she said.
The coronavirus shutdown in China caused domestic sales to drop 96% in the first week of February, while overall sales for February fell 80% year-on-year, according to the China Passenger Car Association.
Jones, the recent recipent of Cox Automotive's Barbara Cox Woman of the Year Award, who also collected PSA Group's Manufacturer of the Year award at last month's AM Awards 2020, said it was “really hard to predict” where the UK market would be by year-end and it would depend on how long the lockdown lasts.
She stressed that it was important for manufacturers and car retailers to “ready themselves” for the restrictions being lifted by putting measures in place to “do things in a different way”…
DMS giant CDK Global International is to reduce its periodic subscription fees by 25% for the month of April to help support dealers through the COVID-19 pandemic.
It announced that it will also offer some VPN capability at no cost and enable remote access to some telephony products with no immediate cost.
Stuart Miles, managing director UK&I CDK Global, said: “We want to assure our customers and partners that we are all in this together.
“It is important to us that all our businesses maintain momentum and are secure for the future as we manage through today’s uncertainty – which is why we are focusing on the sustained health and success of our automotive network.
“Through this crisis we are learning to think differently about how we support one another, our businesses, and our local communities. I wanted to express my commitment to our customers and their employees, and just as importantly, to all CDK employees and stakeholders. We have created this package of solutions and services to help us all get through the COVID-19 crisis together.”
Imperial Car Supermarkets operations director Neil Smith and representatives from the NFDA and IDCP joined Car Dealer Live today.
Smith – who recently set up a Linked group encouraging dealers and industry leaders to share best practice during this torrid time – answered Car Dealer Magazine’s questions about how his firm has dealt with the crisis.
Joining him were Stephen Latham, head of operations at the National Franchised Dealers’ Association (NFDA), which helps represents the interests of motor industry operators here.
And Steve Young, managing director of automotive research experts the ICDP, provided insight into the global picture the pandemic has created for the automotive industry.
Smith commented that the crisis had ‘massively accelerated’ people’s views and focused businesses’ minds on online sales as well as home deliveries, and how it could be made faster. He added that the online sector now was ‘very much a battlefield’, as well as ‘an arms race’ as regards online fulfilment tools. And he pointed out that there had been a great deal of co-operation with pre-coronavirus competitors.
Asked by interviewer Rebecca Chaplin if the car industry would ever be the same again, his answer was an emphatic ‘100 per cent no’.
Latham told how NFDA’s legal team were scrutinising all the new legislation to bring clarity to confusion, and was feeding it out to members daily, an example being technicians not being considered by police to be key workers when in fact they are. The organisation has now created a letter that technicians can produce if challenged.
Looking at the global picture, Young said that on a positive note things were now picking up quite quickly for large groups in China, where the pandemic started. Some smaller dealerships, however, were lagging because they hadn’t taken the mandated protective measures for staff and customers, so hadn’t been allowed to reopen. As such, he said that dealers here needed to think about being prepared for their return to work…
Arnold Clark, Simon Bailes Peugeot and TrustFord have shown their support to the NHS through the donation of 20,000 disposable car seat covers and the provision of vehicles and vital maintenance support to keep essential healthcare services moving.
TrustFord has mobilised its remote vehicle maintaennace vans to assist NHS keyworkers during the Covid-19 coronavirus crisis while it has joined Arnold Clark’s Autoparts UK, Midwest Motor Factors and Monmore Auto Parts businesses in raiding parts departments to answer the call for car seat covers highlighted by IMDA chairman Umesh Samani and Luscombe Motors owner, Robin Luscombe, via AM yesterday (April 1).
Commenting on TrustFord’s response in aid of NHS workers across the UK, the AM100 group’s chairman and chief executive, Stuart Foulds, said: “Our Fleet team is fast tracking essential vehicle orders and aftersales colleagues have been actively supporting customers on site to keep key workers on the road since the crisis started.
“It seemed logical to also mobilise our servicing units to reach those who cannot easily visit a site.
“The idea to give away free disposable seat covers came through an appeal my wife spotted and I was delighted that our Parts Plus team was able to source some to give away.
“We will continue to support and look for ways to support those in essential roles at this critical time.”
Arnold Clark has also loaned total of 400 vehicles to NHS and frontline workers free of charge, ensuring they can get to work if needed, while employees have responded to the government’s call for help and are volunteering within the NHS and are also providing roadside recovery, emergency repairs and parts for all emergency vehicles where necessary.
At every Arnold Clark rental location, there are two vehicles being used by essential community groups to assist local people with food and supplies.
At its Autoparts UK motor factor business, a team of 10 specialist parts people have also been put in place to assist blue light workers.
They will identify the parts required, collect stock from the branch and deliver it to their premises or be available for collection.
Craig McCracken, Arnold Clark’s Autoparts UK group factor manager, said: “We have been overwhelmed by the number of employees who have volunteered to support NHS staff.
“By closing our doors to the public and trade, we are in the best possible position to continue to support the NHS, government and local authorities with the vehicles, parts and servicing they need during this pandemic.”…