Following Prime Minster Rishi Sunak’s Cabinet reshuffle, on Wednesday 26 October NFDA has written to the new Secretary of States for key Cabinet positions, highlighting the principal challenges the automotive industry is currently facing.

Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA) which represents car and commercial retailers in the UK commented:

“NFDA is the leading figure for automotive retailers in the UK and it is important we maintain our close relationship with Government in order to effectively voice the issues effecting our members. Reaching out to Government’s new ministers, highlighting the key issues currently impacting our sector, will give us a head start in addressing these issues and levelling up our industry.”

NFDA has reached out to the following Ministers:

  • Jeremy HuntThe Chancellor of Exchequer
  • Grant ShappsDepartment for Business, Energy and Industrial Strategy (BEIS)
  • Gillian Keegan - Department for Education (DfE)
  • Mark HarperDepartment for Transport (DfT)

The following issues currently facing our sector have been addressed to the government Ministers:

Global supply chain issues

The ongoing semiconductor shortage and conflicts in Ukraine has adversely impacted the supply chain for new cars entering the UK market. In 2022, we have seen over 250,000 fewer vehicles come to market, with delivery times for new vehicles spanning over 12 months now being a regular occurrence for customers.

The shortage of supply for new vehicles has resulted in the sharp escalation in prices for new and used cars, detrimentally effecting the stability of the market and has the potential to effect business and consumer confidence in the future with added concerns relating to the broader economic climate.

Energy prices

Franchised Dealers have come under significant financial pressure since the hike in energy prices, our reports suggest that dealers’ energy bills were expected to rise by an unsustainable 250% prior to the energy bill support package. It is therefore crucial that Government continues to support the sector beyond when the relief scheme is set to expire, with any additional support greatly welcomed.

With reductions in operations and redundancies becoming increasingly more likely as the crisis intensifies, a sector which employs over 540,000 people, these changes will have a detrimental effect to many working lives.

Electrification

The decarbonisation of transport, which will help the UK reach its 2050 net-zero targets is a cause for concern. The deadline of 2030 banning the sale of new Internal Combustion Engines (ICE) is fast approaching. Currently, there is very little government support or financial incentives endorsing the switch to electric, whilst NFDA members are investing heavily in this transition, contributing towards the sector meeting these ambitious deadlines.

Similarly, the current patchwork of EV charging infrastructure is serving to drive regional disparities in EV adoption. The NFDA seeks further investment into the charging network, to keep pace with our European counterparts and to drive the electrification of the vehicle parc.

In 2019, NFDA launched its Electric Vehicle Approved (EVA) scheme, endorsed by Government’s Office for Zero Emissions (OZEV) and independently audited by Energy Savings Trust, to certify retailers’ excellence in the electric vehicle sector. A relationship we would like to maintain heading into the critical years of decarbonising transport, ensuring franchised dealers are getting the full support from Government in a bid to meet 2050’s net-zero targets.

Skills shortage

The automotive industry is already experiencing a shortage of skilled worker to fill showrooms and workshops, with the transition towards electrification about to make this ever more apparent. The need to reform the apprenticeship levy will be crucial toward finding and skilled labour and attracting young talent into the industry.

NFDA’s employment initiative, Drive My Career (DMC), is working hard in the background to promote franchised members careers pages to its core audience of 16–24-year-olds, pushing to change the perception of the automotive industry and support them in finding a career through careers advice.