The impact of COVID-19 and MOT extensions on independent garages in the motor industry - an explainer
12 May 2020
Georgie Akehurst, Research Officer
On 30 March the UK government announced a six-month extension of MOT certificates to support social distancing rules established as a result of Covid-19. Along with other professions, vehicle mechanics have been classed as providing a key service during this time. However, the impact of the six-month MOT extension and social distancing rules have had considerable effects on the ability of independent garages to stay open and provide key services.
Undoubtedly, Covid-19 has had a significant impact on businesses across the UK – once rapid lockdown measures were enforced and the government made decisions out of necessity, many industries faced unprecedented challenges. It is becoming clear that as the effects of lockdown have varied between industries, the shape of recovery will also vary.
As part of my undergraduate dissertation I researched the motor industry, exploring the experiences of small business owners in managing multiple service roles, teamwork, performance and how these aspects contributed to perceived emotional wellbeing and identity. So, I was interested to understand how Covid-19 is shaping the sector and the experiences of those working within it. As part of this, I reviewed the published stance of the relevant industry body, the Independent Garage Association (IGA), and spoke to a small garage owner for their perspective.
What happened to the sector?
On 30 March, motorists were granted a six-month extension of their MOT by the Department for Transport, enabling them to continue vital travel, e.g. driving to work or to shops for essentials. It also reduced the risks of attendance at MOT centres and garages at a time when social distancing is crucial. Alongside this, the public are being actively discouraged from driving for anything other than essential travel.
The extension means that car drivers can defer their MOTs for six months if their test was due on or after 30 March. This extension will be in place for the next twelve months after which the government hopes for a clearer picture of ways forward. Along with the extension, the government has stated that road users must still ensure their vehicles are safe to drive even if their MOT has been extended.
How has the role of mechanics changed since Covid-19?
Mechanics are now classed as providing key services, tasked with maintaining essential modes of transport – a necessity outlined by the government in late March. As a result, garages are attempting to continue opening daily to carry out necessary vehicle maintenance.
What is the impact in practical terms?
The motor industry has seen a significant decline in MOT bookings and a rise in cancellations of current bookings. The six-month MOT extension largely explains these abrupt cancellations and fewer bookings to carry out maintenance.
However, the significant decline in miles travelled in the UK will have affected the decline in available work for mechanics – the driving app Waze has reported that miles travelled has reduced by more than 70% (Motoring Research, 2020).
Nonetheless, from a public health perspective, there is a concern regarding the safety of vehicles, as according to the IGA, the current MOT failure rate is 31%, meaning that without mandatory testing approximately 10 million vehicles do not meet basic levels of compliance and roadworthiness. Whilst the government has stressed the need for road users to ensure the safety of their vehicle, issues with vehicles may not always be obvious and detectable to drivers.
Why are garages struggling?
SMEs carry out approximately 80% of all MOTs in the UK (IGA, 2020), and as a result of reduced vehicle use and the MOT extension, many independent garages are now closing due to MOT and essential maintenance cancellations, reducing access for those who require maintenance for essential travel. Other independent garages have been offering discounted MOTs to motorists in a bid to stay competitive and remain open, however this is causing further losses to the industry and will affect recovery (Motoring Research, 2020)
What else is affecting garages?
The small business owner I spoke to also believes the effects of Covid-19 and subsequent measures are impacting on other areas of business integral to the operation of the industry, such as parts suppliers and other subcontractors. This means independent garages find themselves lacking the basic kit to carry out essential vehicle maintenance despite being classed as a key service.
What’s the view at practitioner level?
The IGA, whilst generally supportive of the Covid-19 restrictions, is calling on the government to continually monitor and potentially adapt the six-month extension in light of its impact on the sector.
The garage owner I spoke to believes it is contradictory for mechanics working in independent garages to be classed as key workers providing an essential service to those who require it, to struggle to maintain their service networks and stay open. The financial impact for SMEs such as this, is unpredictable:
“It’s just such a shame that everything you’ve worked for over the last three and a half years is going to wither away quite quickly.”
Independent garage owner, Sussex, April 2019
The IGA has called for the government to offer independent garages business rates relief to enable them to stay open and offer services to other key workers regularly using their vehicles to carry out vital duties.
What about the future?
The future for all SMEs remains uncertain against the current public health crisis. The context for independent garages is unusual given their designated key worker status alongside the significant reduction in their work. Unsurprisingly, there are fears as to whether, and how quickly, the industry can recover. It is worth remembering the promise of demand for these SMEs in the future, which other sectors such as airlines may struggle with. But as with other industries, whether the motor industry can recover at the speed the economy will require is as yet uncertain.
The IGA sees the future for the industry as highly dependent on how long the MOT deferral stays in place. As things stand, independent garages will see a significant reduction in MOTs in March/April/May of next year as a direct result of the six-month extension, which may further impact them in the coming years (IGA, 2020).
However, hope does remain for the recovery of independent garages within the industry, as 70% of UK motorists prefer to use and return to independent garages rather than main dealers (Automotive Management, 2018), One reason for this loyalty which will hopefully remain post-pandemic, is the ability for motorists to speak to the mechanics which work on their cars (Automotive Management, 2018). The ability for the employees of independent garages to enact multiple roles due to the size of the organisation, e.g. point of contact, customer assistance and mechanic services enables SMEs to retain customers, as I found in my dissertation. Simultaneously, if the industry were to struggle to recover, there may not be sufficient services for the public to rely on to ensure the safety of their car.
Still, a public safety concern remains in the current climate. The potential disintegration of a workforce which maintains the majority of vehicles in the UK poses significant threat to road-users and the public, including key workers who require their vehicle for transport, as whilst road use has reduced significantly, it has not diminished completely.
Any views expressed are those of the author and not necessarily those of the Institute as a whole.