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May 26, 2020 06:38 AM

UK to allow car showrooms to reopen ahead of other businesses

Nick Gibbs
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    Bloomberg

    LONDON -- Dealerships in the UK will be allowed to reopen for car sales on June 1 as the British government relaxes measures imposed to slow the spread of the coronavirus.

    Showrooms are being allowed to open earlier than other non-essential shops because "they often have significant outdoor space, where it is generally easier to apply social distancing," Prime Minister Boris Johnson said on Monday.

    Other non-essential shops will be able to re-start business from June 15, if it is safe to do so.

    Industry association SMMT welcomed the decision, saying the move will help automakers that have factories in the UK, as well as car retailers.

    Showrooms will be able to operate while also ensuring safety of customers, staff and other visitors, SMMT CEO, Mike Hawes, said on Twitter.

    The SMMT has pressed the government to allow showrooms to reopen, claiming the closures cost the Treasury 61 million pounds ($75 million) a day in lost taxes and state-wage support.

    "Allowing dealers to get back to business will help stimulate consumer confidence and unlock recovery of the wider industry," Hawes said last week. "We see no reason for delay."

    The UK is Europe's second largest car market after Germany and has 4,900 dealers, according to the SMMT. UK sales in April plunged 97 percent to just 4,321 cars due to the lockdown.

    Preparations for reopening at dealer group Vertu, which has 130 showrooms in the UK, include temperature checks for staff and the installation of plastic screens to protect employees interacting with customers, CEO Robert Forrester told the BBC.

    Coronavirus-related measures also include solo test drives without a salesperson present. "That will be quite a major change," Forrester said. "There are some fairly obvious potential risks, but we trust the vast majority of customers to do the right thing and come back."

    Dealers have been allowed to offer 'click and collect' services for much of May but the combination of almost two months of lost sales as well as the longer impact on demand is expected to push UK registrations down 27 percent for the year, the lowest since 1992, the SMMT said.

    Dealerships in other European markets including Germany, France and Italy have already been allowed to resume car sales.

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