SMMT boss Mike Hawes has said that he doesn’t hear a ‘clarion call’ to support mandatory technician licensing, and that any form of scrappage scheme will be more of a ‘restart mechanism’ to support jobs across the whole motor industry, rather than benefiting individual vehicle manufacturers.
The Chief Executive’s comments were part of a wide-ranging interview which was part of the inaugural web cast from Autocar Business.
On the subject of technician licensing, he said: “ We don’t have a clarion call from our members for licensing. It is about being competitive and it is about satisfying the customer and delivering the quality of service, but I don’t sense an appetite from the government”.
“As long as the market works and that where competition between independents and franchises, in terms of retail as well as aftermarket, that will be where the government is and that is where our members are”.
Answering a question from CAT contributor Rob Marshall, on whether the work done by SMMT with franchised dealers is to the detriment to the aftermarket, Hawes replied: “We’re trying to be a voice for the industry, irrespective of what part of the industry you are in, and that’s the strength that we would argue we have in numbers and we will always support ever single section”. Pointing out that the aftermarket is the Society’s largest section in terms of membership numbers, he said: “There are very few areas where you will get competitive differences between sections. Yes, there will be some, but you manage them so the market is as strong as possible, so the strongest survive”.
On the subject of a possible new scrappage scheme, Hawes admitted that any proposal would have to be one that benefits the whole industry, and that met the public’s perception of the motor industry and how it benefits from government incentives. Stating that the new proposal to the government would be ‘all about jobs’, he said: “We think we are presenting something that will be beneficial to the exchequer, and in the current climate we would present it as exactly as we would be doing, trying to prevent redundancies”.
Asked if the uncertainty over Brexit was going to put UK manufacturing at a disadvantage, Hawes answered simply “Yes”, adding: “At the the moment, we’re still in the depths of uncertainty. Ys, we know we are leaving the customs union and the single market, but there is a real need for businesses to prepare to trade in a different way”. Adding that rules and paperwork made everything “fundamentally different and much, much more complicated” Hawes said: “We still don’t know if we are going to get a deal. From the outset when the referendum was first announced, UK industry was very clear. We’re going to need an ambitious trade deal that avoids tariffs and non-tariff barriers, because immediately if you put a 10 percent tariff on an industry that aims for a two to four percent return on investment, then you can’t swallow that kind of cost and still expect to remain competitive”.
Asked about the date moving forward for the ban on petrol and diesel engines, Hawes was of the opinion that the UK could ‘just about cope’ with a 2035 deadline. “The government has made clear it wants to bring forward its 2040 date. I think the majority of the industry could just about make 2035. I think earlier than that you would struggle to get support for.
“The diversity of UK industry will mean some companies will struggle. It’s about how quickly the market will transition, and that’s dependent on how attractive the product proposition is, how much it costs and in particular what the infrastructure is.”
Referencing a government climate change white paper that was published last year, Hawes explained that the detail says if you are going to move it forward to 2035 or potentially earlier, you have to recognise that there are going to be significant ‘social, industrial, commercial consequences’. “How you manage that is going to be critical” he said.
“For all the investment you make in these technologies, they’ve still got to be affordable and convenient for the consumer. And that means oversupplying the market in terms of charging infrastructure.”
Hawes’ interview was the first of a series of in-depth conversations with industry leaders, which are part of the new Autocar Business platform. You can sign up to view the seminars and to receive the free newsletter here