9 June 2020
Government support has been vital for the survival of the UK’s car body repair sector, with 84.8% of bodyshops taking advantage of fiscal support on offer, over and above that of the Furlough scheme, according to our latest research.
As lockdown continues to ease, there are positive signs of business recovery as motor accident claims have risen from a low of 25% of pre-Covid levels in mid-April, to 65% week ending 5 June.
With PM, Boris Johnson announcing lockdown easing measures on 10 May, business has started to return, however for the month of May, bodyshops only recorded 38.4% of expected turnover.
It is far from business as usual as 68.6% of the bodyshops continue to operate on a reduced staffing basis, with the overwhelming majority (91.5%) taking advantage of the Furlough scheme.
Mark Bull, director of Trend Tracker said: “It is good to see that as the UK’s roads are getting busier and as miles being travelled increases, the accident repair rates are also rising which is good news for bodyshops.
“However, financial pressures are taking their toll for some. Whilst it is clear the government’s fiscal support has been widely welcomed, there are still some bodyshops waiting for a decision to be made. There still seems to be regional disparity regarding rates relief, with some bodyshops gaining support relatively easy, whilst others appear to have been declined assistance on an arbitrary basis or are facing red-tape as they await a response.
“There is also concern that certain aspects of the fiscal support package will only defer tough business decisions for a period of time, and it seems inevitable there will be business closures and widespread redundancies as the year unfolds.”
The survey also raised the emotive issue of Covid-19 cleaning/sanitising charges. Bodyshops believe they should be able to charge an appropriate fee to their insurer customers, however there appears to be no consensus on what figure this might be, with some believing they should absorb the cost and others suggesting up to £400 per repair should be applied.
Bull added, “I would urge the industry to come together over this matter as a standard hasn’t been determined for Covid cleaning/sanitising during repair. Therefore, an appropriate and acceptable cost lies at the behest of the bodyshop and ultimately the insurer to agree, but this leads to unnecessary conflict that could easily be sorted out.”
To conclude on a positive note, an overwhelming majority of bodyshop businesses, 83.8%, remain ‘very confident’ or ‘cautiously confident’ about their prospects, despite the fall in motor accident claims volumes over the period of the crisis.
Download the Covid June Update Report free of charge here.