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UK car production crawl to a 45% decline in August

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uk car production crawl to a 45 decline in august

Car factory production in the UK fell by a massive 45 per cent in August ,as weak demand for new motors during the Covid-19 pandemic continued to strangle the automotive industry.

Just 51,039 new motors left UK assembly lines last month compared to 92,153 in the same month of 2019. 

That’s despite a predicted surge in sales in September with the industry pinning hopes on motorists flocking to dealerships to order vehicles with the latest 70 plate.

The trade body said any efforts to ramp up manufacturing in August had ‘stalled’ amid the coronavirus crisis and warned that weak demand in key overseas markets will now be compounded until the end of 2020 by the latest measures implemented by the government to curb the nation’s rising infection rate. 

'Increasingly disturbing times' for UK car manufacturing: The reduced global demand for new cars caused by the pandemic has seen vehicle production slump another 45% in August, new figures released today have revealed

‘Increasingly disturbing times’ for UK car manufacturing: The reduced global demand for new cars caused by the pandemic has seen vehicle production slump another 45% in August, new figures released today have revealed

The SMMT said August outputs had suffered a secondary blow from some vehicle plants implementing annual maintenance shutdown periods, which have been delayed from April when car factory workers were forced to stay home.

As a result, production for UK dealers fell by 58 per cent, with just 7,795 new cars built for customers in Britain last month compared to 18,710 in August 2019.

Export demand also shrank, meaning production for foreign markets fell by 31 per cent. 

A total of 43,244 new motors were built for overseas sales, meaning more than four in five new cars leaving factories are exported. In August 2019, 73,443 vehicles were produced for customers outside of the UK.  

So far this year UK car production is down 40 per cent, representing a loss of 348,821 units.  

Slump: UK car production has been hammered by the pandemic, with the fall in demand and restrictions imposed on factories resulting in some 13,500 job losses in the sector in 2020

Slump: UK car production has been hammered by the pandemic, with the fall in demand and restrictions imposed on factories resulting in some 13,500 job losses in the sector in 2020

August outputs saw 2020 car manufacturing limp over the half-a-million unit mark. By the end of the same month last year some 867,000 vehicles had left UK assembly lines

August outputs saw 2020 car manufacturing limp over the half-a-million unit mark. By the end of the same month last year some 867,000 vehicles had left UK assembly lines

The news comes as the UK braces for a second wave of coronavirus, with local lockdowns in place across parts of the country and tighter social and business restrictions to curb the rate of transmission. 

This is likely to limited an expected rise in demand for new cars this month, with the industry desperate for a strong September performance.

‘These are increasingly disturbing times for UK car makers and suppliers with the coronavirus crisis weighing heavily on the sector 
Mike Hawes, SMMT chief executive 

The ninth month of the year is traditionally one of the most popular times for consumers to buy cars due to the arrival of a new registration number – in this case the 70 plate – and a raft of deals offered in showrooms to encourage motorists to splash their cash. 

With this predicted spike in dealer activity now strangled, the SMMT said Thursday’s announced Job Support Scheme will be critical for the industry to survive while market demand and production capacity remain diminished.

So far this year UK car production losses due to the crisis have cost manufacturers more than £9.5 billion, losses that will be impossible to catch back, the trade body said. 

Meanwhile at least 13,500 jobs are known to have been cut across the entire UK automotive sector in 2020, with a recent SMMT member survey highlighting that one in six auto jobs are at risk of redundancy when the current job support scheme ends.

UK car production losses throughout 2020 have cost manufacturers more than £9.5 billion - losses that won't ever be recovered by the motor industry

UK car production losses throughout 2020 have cost manufacturers more than £9.5 billion – losses that won’t ever be recovered by the motor industry

Mike Hawes, SMMT chief executive, said, ‘These are increasingly disturbing times for UK car makers and suppliers with the coronavirus crisis weighing heavily on the sector. 

‘Companies are bracing for a second wave with tighter social and business restrictions making the industry’s attempts to restart even more challenging. 

‘The UK industry is fundamentally strong and agile, and the measures announced yesterday by the Chancellor are welcome and essential, although we await more details of how they will work for all businesses and crucially large manufacturers. 

‘Companies need to retain skilled jobs and maintain cashflow and we may need more support to boost business and consumer confidence later this year. 

‘Moreover, with fewer than 100 days until the Brexit transition period ends, we need urgent agreement of an ambitious free trade deal with our largest market to avoid the second shock of crippling tariffs.’ 

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Trainline boss Clare Gilmartin to step down for family reasons

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trainline boss clare gilmartin to step down for family reasons

Shares in the rail ticket firm Trainline dived today after the company revealed its CEO Clare Gilmartin will leave her post in February next year to spend more time with her family.

They fell 11.7 per cent to 294.2p as it was announced her replacement would be the group’s current chief operating officer Jody Ford.

Gilmartin took charge of Trainline in 2014 and helped oversee a period of rapid expansion for the company until this year when the coronavirus and the UK government’s advice to Britons to avoid public transport caused rail travel to slump.

Gilmartin scooped a massive £50million windfall last year when Trainline floated on the LSE

Gilmartin scooped a massive £50million windfall last year when Trainline floated on the LSE

Gilmartin scooped a massive £50million windfall last year when Trainline floated on the LSE

Its success has been partly predicated on higher purchases of tickets on mobile phones, but also because it offers a one-stop-shop to buy tickets on a fragmented UK rail network that contains multiple rail operators.

This growth enabled the Dublin-born boss to scoop a massive £50million windfall last year when her company floated on the London Stock Exchange, thereby becoming one of the country’s wealthiest female executives in the process.

Gilmartin will stay on as a ‘senior advisor’ at the business, but she declared that ‘the time has come for me to spend more time with my family.’

‘I am immensely proud of our progress over the last several years – including driving the advancement of digital ticketing and the customer shift online, our international expansion and our track record for meeting and exceeding expectations.’

Her successor only joined Trainline in September but has extensive experience in leadership positions. Mr Ford’s prior role was as CEO of Photobox Group, the parent company of greeting cards business Moonpig.

Like Ms Gilmartin, the University of Exeter graduate also worked for eBay, where he was its vice president of global growth. Before that, he was a consultant at McKinsey and PricewaterhouseCoopers.

Both Clare Gilmartin and her successor Jody Ford have worked in senior roles at eBay

Both Clare Gilmartin and her successor Jody Ford have worked in senior roles at eBay

Both Clare Gilmartin and her successor Jody Ford have worked in senior roles at eBay

Ford said he joined Trainline because ‘it is a tech innovator with huge growth potential’ encourages ‘greener travel choices’.

‘I am very much looking forward to bringing my digital experience to bear as CEO and continuing Trainline’s focus on working with the rail and coach industry to make travel as easy and friction-free as possible for millions of customers in Europe and beyond.’

The firm disclosed last month that it had processed over two million UK-based refund requests in the first quarter of the fiscal year due to the pandemic and had seen business sales drop to just 1 per cent of their equivalent level in the prior year.

International and UK consumer revenues were better, but at £79million, they were still only 9 per cent of what they took home in the first three months of the 2020 financial year. 

Office of Rail and Road figures showed only 35 million journeys were made on the rail network between April and June, its lowest amount since the mid-nineteenth century. Passenger numbers are now running at about a third of their usual size.

Senior company executives including Gilmartin took pay cuts in response to the tumble in rail passenger numbers. Nonetheless, she earned another £3million after selling 800,000 company shares in late August.

Figures from the Office of Rail and Road showed only 35 million journeys were made on the rail network between April and June, its lowest amount since the mid-nineteenth century

Figures from the Office of Rail and Road showed only 35 million journeys were made on the rail network between April and June, its lowest amount since the mid-nineteenth century

Figures from the Office of Rail and Road showed only 35 million journeys were made on the rail network between April and June, its lowest amount since the mid-nineteenth century 

Trainline has received further public attention during the pandemic for charging and holding onto large commission fees for tickets booked through its website.

This has happened while rail companies are required to hand over any money they have generated to the government under the terms of a rescue package it received from them earlier this year.

The move effectively renationalised the railways and ended the franchise model that had arisen after privatisation in 1994.

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‘Zero emission mandate’ could force makers to sell more electric cars

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zero emission mandate could force makers to sell more electric cars

Manufacturers could be forced to sell a rising share of electric cars each year to speed-up the shift to zero-emission vehicles, according to reports.

The Times said ministers are considering a California-style ‘zero emission vehicle mandate’, which would be similar to the one introduced in the US state in the 1990s and demand a minimum volume of plug-in cars are sold by brands.

MPs believe the mandate would be the most effective way of shifting the UK’s car make-up to electric vehicles, to bridge the proposed ban on sale of petrol, diesel and hybrid cars in 2035.

Mandate for electric cars: The government is considering plans to force vehicle manufacturers to sell a rising share of plug-in models each year to speed-up the shift to zero-emission vehicles, according to reports

Mandate for electric cars: The government is considering plans to force vehicle manufacturers to sell a rising share of plug-in models each year to speed-up the shift to zero-emission vehicles, according to reports

Under the mandate, car makers would be required to sell an increasing volume of zero emission vehicles as a share of their overall sales.

If they fail to meet their EV target, they would be able to purchase credits from other manufacturers.

The government said it would consider a mandate in a response to a Committee on Climate Change report published in the summer.

It said it recognised a need to ‘go further than the existing regulatory regime to reduce CO2 emissions from road transport’, and that it was are looking into a mandate as part of the Transport Decarbonisation Plan. 

Already in the first nine months of 2020, demand for battery electric cars is at a record high.

Over 66,600 pure electric vehicles have been bought by the end of September – a year-on-year increase of 184 per cent increase, which has seen registrations almost double the full-year sales of pure EVs for the entirety of 2019 with three months to spare.

These electric-only cars now account for 5.4 per cent of all vehicle registrations in the UK, with that market share set to continue an increase as demand for diesel cars in particular shrinks and more people convert to zero-emission model while grants are available.

If a mandate was put in place it would allow the government to retract these subsidies and tax incentives that are currently exclusively available to buyers of electric cars, such as the £3,000 Plug-in Car Grant and VED road tax exemption. 

Sales of battery electric vehicles are booming at the moment, as motorists are taking advantage of incentives, such as the £3,000 Plug-in Car Grant, when purchasing EVs

Sales of battery electric vehicles are booming at the moment, as motorists are taking advantage of incentives, such as the £3,000 Plug-in Car Grant, when purchasing EVs 

And the Government has made no secret that it wants to phase out the availability of electric-car deals, which it outlined in its Road to Zero document in summer 2018.

It said: ‘As the market becomes better established and more competitive, the need for direct government financial support will decrease.

‘We therefore expect to deliver a managed exit from the grant in due course and to continue to support the uptake of ultra low emission vehicles through other measures.’

The Times reported that ministers also believe a mandate would help to attract electric car manufacturers to setup production lines in Britain to boost the economy. 

It comes as government is expected to announce plans to fast-track the deadline for the banned sale of petrol and diesel cars, which could be brought forward to as early as 2030.  

MPs last week urged the Prime Minister to accelerate the ban to a decade’s time in order to help the Government achieve its target of reaching net zero emissions by 2050.

The plans, which would dramatically accelerate the transition to zero-emission vehicles, are expected to be announced later this year alongside a series of new clean energy policies.

Downing Street had intended to unveil the blueprints in September, but the announcement will now be pushed back as ministers focus on soaring numbers of coronavirus cases, energy and transport insiders told the Guardian last month.

The ban, backed by the Committee on Climate Change, is likely to be set out by the Government in autumn alongside plans for Britain to become a carbon-neutral economy by the middle of the century.

Ministers are eager to pull the plug on grants, subsidies and incentives currently offered to owners of electric cars, stating that 'the need for direct government financial support will decrease'

Ministers are eager to pull the plug on grants, subsidies and incentives currently offered to owners of electric cars, stating that ‘the need for direct government financial support will decrease’

Greenpeace UK’s head of politics, Rebecca Newsom, gave her full support to a mandate. She said: ‘Moving the ban on petrol, diesel and hybrid cars and vans forward to 2030 is an absolute must if the government is to meet its legally binding climate commitments. Any later and it becomes almost impossible. 

‘But a ban alone won’t see this change take place without the policies that force it over the line. That’s why a zero emissions vehicle mandate for car manufacturers would be an incredibly smart move to bring new jobs to UK. 

In order to dangle the carrot for people buying a new car, the government must use the stick with manufacturers to ensure costs come down and sales go up.’

A new study by vehicle breakdown recovery provider Green Flag said the average UK driver now expects to purchase an electric car within the next four years. 

The poll of 1,500 drivers found that more than half (54 per cent) are today in favour of electric cars, with fuel savings and eco-friendliness the biggest perks, followed by lower servicing an maintenance costs and the convenience of being able to charge a vehicle at home.

Mark Newberry, commercial director at Green Flag, said: ‘Our research has found that the main concern for drivers converting to electric is running out of charge mid-journey. Try to think back to the last time that you broke down because you ran out of petrol?

‘We want to reassure drivers that it only takes a few small adjustments to enjoy an electric vehicle – if you look after your car, prepare for your journey and drive carefully you should see minimal changes to your driving routines.’

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Men and younger workers more likely to shun pensions during pandemic

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men and younger workers more likely to shun pensions during pandemic

A quarter of savers have stopped or cut back on paying into their pensions during the Covid-19 crisis and more are considering doing so, new research reveals.

Men and younger workers are more likely to shun pension saving to make ends meet than women and older workers in response to the upheaval in jobs and personal finances caused by the pandemic, the study shows.

The findings from Hargreaves Lansdown echo a separate survey, which found many people are pausing or reducing contributions because they need money for essential spending, were made redundant or were furloughed. 

Covid-19 crisis: Men and young workers are more likely to shun pension saving to make ends meet

Covid-19 crisis: Men and young workers are more likely to shun pension saving to make ends meet

Some 14 per cent of people have cut their contributions, and 11 per cent have cut them entirely, while 8 per cent may do so in future, according to the latest survey of 2,000 adults in September.

The trend could cause serious damage to people’s retirement prospects as they wind up with smaller pots, but auto-enrolment comes with a failsafe.

(Source: Hargreaves Lansdown)

(Source: Hargreaves Lansdown)

Employers must re-enrol staff who leave once every three years, unless they choose to stay opted out.

But employers do this on their own schedule, usually on a rolling basis starting from when they first introduced auto enrolment, not timed on when a worker dropped out.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, says younger people may be quicker to stop contributions because their pension feels like a more distant consideration, so it is an easy cost to cut.

But she points out that the money you put in when you’re younger works the hardest for you – because compound growth boosts pots more over longer periods – so this will come at a higher cost than they expect. 

Coles adds that if you cut back or stopping paying into a pension the impact will also be magnified, because you lose pension tax relief from the government and free cash from your employer too.

Who pays what: Breakdown of minimum contributions under auto-enrolment 

How pension contributions stack up under auto-enrolment schemes (Source: The Pensions Advisory Service)

How pension contributions stack up under auto-enrolment schemes (Source: The Pensions Advisory Service)

But she acknowledges that if you are now on a lower income, have cut out luxuries and shopped around to minimise the cost of essentials and are still struggling, then you may need to pause pension contributions.

‘The good news is that the way that automatic enrolment works should stop temporary pauses in payments becoming enormous gaps,’ says Coles.

‘If you opt out of a workplace pension, you will automatically be put back in after three years, so even if you don’t get round to kick-starting payments yourself, you’re likely to accidentally do the right thing.’

Meanwhile, Coles says some people will have seen their pension funds drop in value due to big market falls early in the Covid-19 crisis, but some are well ahead of where they started the year, depending on where they are invested.

‘Most pensions aren’t just invested in equities either. Most will have a balance of different assets, so overall pension funds didn’t fall as far, and have recovered significantly,’ she says.

‘By the end of June, according to Moneyfacts, the average pension fund was only 4.4 per cent down from the start of the year.

‘It’s worth taking a look at where your pension is invested, and how it is performing, not just to see how it’s doing, but to be certain it reflects your aims and objectives.

‘If you have a workplace pension and you’re not sure how to do this, talk to your HR department, and ask them to send you details.’ 

Read our guide to checking if your work pension is up to scratch here. 

What should you do about your pension if you are strapped for cash?

Pension experts urge people to keep paying into pensions if they can afford it, to avoid harming their chances of a decent retirement.

Find out the three important rules to remember, and the options for what to do about different types of pension here. 

You can keep paying in to some types of pensions even if you have left your employer, and payments into pots based on 80% of salary are protected if you were furloughed. 

Read a 10-step guide to sorting out your pension here. We also have tips for people in their 20s wanting to get their pensions on track here, and help for older savers nearing retirement here. 

TOP SIPPS FOR DIY PENSION INVESTORS

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