The cost of living crisis is an unwanted reality that the entire population is facing, and the motor trade industry is no exception here in the North of England. Of those surveyed, increased petrol prices alone have led to a 22% increase in business costs since January 2022. And it doesn’t stop there: 40% of motor trade employers have already let staff go, with a further 35% considering making cuts to their staff before the end of the year.
In the North East, 81% of motor trade businesses have or will experience redundancies before the end of the year, compared to 70% in the North West. Both show a bleak picture for motor trade professionals in these regions. There are many factors which could be impacting this, both directly in the form of supply costs increasing to indirectly through the cost of living’s impact on the population. A recent RAC report stated that young people are increasingly putting off car checks and repays due to their own squeezed finances.
(Graphic displays UK wide data)
In order to establish the facts and learn about the severity of inflation-based challenges affecting the nation, a specialist motor trade insurance provider, ChoiceQuote, commissioned an independent survey of 303 motor trade professionals in the UK. The picture it paints is a pessimistic one.
80% of the professionals in the North surveyed said that their business is facing serious or very serious issues linked to inflation. In fact, only 1.5% of motor trade businesses in the North say that they currently aren’t facing challenges to their business.
(Graphic displays UK wide data)
How is this affecting the industry’s business decisions? 48% expect their company to struggle, and 28% expect trading to remain stagnant.
Whilst businesses may not cease operating completely, 40% of motor trade employers have already let staff go as a consequence of rising costs, with 35% planning to lay workers off before the end of this year. Similarly, 81% of motor trade professionals in the North East are expected to have reduced working hours within their business before the start of 2023, in addition to 70% of those in the North West, leading to further unemployment in the region.
Businesses in the North East were are little quicker off the mark, with 69% already having increased customer prices this year, whereas in the North West 30% have done so. However, this looks to balance itself as the year concludes, with 25% of motor trade businesses looking to increase prices before the year is out. Compared to 52% in the North West.
Decision makers are making the tough decision as to whether they persevere through these difficult times or switch to a different kind of work due to the strain that the inflation crisis has had on their professional and personal life. More than 2 in 3 (71%) of motor trade professionals across the North feel more stressed due to the impact of inflation on their personal finances (69% in NE and 73% in NW).
Derek Henry, Managing Director of ChoiceQuote comments: “It’s definitely a worrying outlook. In recent months, rising new and used cars, as well as fuel prices have meant that many businesses and traders have had to rethink their strategy or make some incredibly tough decisions on their future.”
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