Automotive industry warnings of no-deal
A meeting of senior figures in the automotive industry warned that up to a third of UK repairers could be forced to close their doors within two weeks of a no deal Brexit.
According to Business Insider, which has seen the minutes of the meeting, it was claimed that up 1,000 companies in the sector could collapse in a fortnight. This is because the repair industry relies heavily on 'just in time' supply chains, and doesn't have great reserves of cashflow to sustain the business in the event of continued disruption or delay.
The minutes said that, without a freeflow of parts into the UK, repairers would have to cancel jobs.
The meeting was attended by 17 industry leaders.
Business Insider reported that the minutes said, 'If the import delays were prolonged – three to four weeks for example without parts availability, the consequences to our car body repairers could be dire.'
It added that 'many repairers would have run out of cash and face closure,' by week three, and by week four 'even repairers with strong balance sheets would be in trouble.'
Chris Weeks, director of the National Body Repair Association, said that when attendees realised the scale of the problem there was a 'reality check moment' within the room.
Steve Field, managing director of Page Automotive Accident Repair Group, told Business Insider, 'If we cannot receive parts, we cannot repair cars. If we can't repair cars, we can't maintain our cash flow. If we don't have cash coming in, we can't meet expenses going out of the business.
'We have two to three per cent return on sales, that's our profitability. We don't have any cash lying around. There are no cash reserves. There is not one public limited company in the repair network. It's all privately owned businesses of varying sizes. Most run using overdrafts.'
Kate Goodwin from The Innovation Group, added, 'Even a minor disruption to this process will very quickly have a drastic impact on their ability to repair their customers' vehicles and ultimately on the financial health of the repairer.'