Sunak's petrol car ban retreat has 'diminished people’s enthusiasm' for EVs

Hefty price tags are putting many consumers off buying electric vehicles while the UK government’s recent u-turn on the banning of new petrol and diesel cars has “diminished people’s enthusiasm” for EVs, a leading Scottish industry figure has cautioned.

Brian Gilda, chairman of Ford dealership heavyweight Peoples, which he founded 40 years ago, also said he was having talks with Chinese car manufacturers that are looking to enter the UK market. Asian car makers such as Chinese-owned MG have been among the fastest-growing brands in Britain in the past couple of years with their focus on more affordable electric motors. China is also the world’s biggest supplier of the battery packs used in EVs.

“We are having significant and material conversations with two mainline Chinese [manufacturers] that are coming into Europe and certainly Britain in a big way,” said Gilda, who is a founder director of the Retail Automotive Alliance independent purchasing group. “They have product line-ups that are breathtaking. The European and American manufacturers are paying attention to that.”

Last month, Prime Minister Rishi Sunak announced a five-year delay on the banning of the sale of new petrol and diesel only cars, meaning a requirement for all new cars to be “zero emission” will not come into force until 2035.

Peoples is one of the largest independent dealerships in Europe retailing only Ford cars and commercial vehicles.

Gilda said the decision hadn’t come as a surprise but it did present a “real irritant” for Ford because their position is to be “all in with electric”. He added: “As a consequence hybrids were not as high up the production ratio as required. They have now had to recalibrate the manufacturing process to take in that differential. Ford will have to work hard to plug the gap.

“In terms of the various governments, whether it’s north or south, I think they blow a trumpet in terms of carbon neutrality and everything else when it suits them and blow a different trumpet when it comes to preserving jobs. Given the opportunity just now, I would prefer to preserve the jobs and work towards the 2035 date.

“Consumers are concerned about the cost of electric vehicles,” Gilda added. “They probably also recognise that over time prices will come down and because of this legislation change it has probably diminished a lot of people’s enthusiasm to get one in the next couple of years. However, I think that will change as the product comes online.”

His comments came as the Peoples dealership group reported a double-digit hike in annual turnover as the sector looks to bounce back from supply chain woes and well-publicised semiconductor shortages. Those headwinds have dented the UK car market since the pandemic but the latest Peoples’ accounts show that new car sales were up by more than a fifth over the year. Used car sales rose by 11 per cent and profits from aftersales business soared by 31 per cent. Commercial vehicle sales were down 17 per cent due to an industry-wide shortage.

Peoples Group was founded in 1983 by entrepreneur Brian Gilda and is celebrating its 40th anniversary. Picture by Martin Shields

Turnover topped £306.8 million in the 12 months to the end of July, up 11.3 per cent on the year before. The group reported a pre-tax profit of just under £7.7m, down on last year’s record haul of £8.48m. It described a 2.5 per cent return on sales as an “excellent performance set against industry competitors”, though that figure was below the previous year’s 3 per cent. Margins in the motor industry have been wafer thin for some time.

Gilda, whose daughter Nicola is the senior director on the group’s new operational board, said: “People think we as an industry have huge margins, but the reality is that it’s probably bumping around one and a quarter as an average. Our numbers were up on new and used and I was happy with that. Aftersales was up a lot and I think that is testament to the quality of work that we do with our existing clientele. I’d like to have been up at a bigger number but I was absolutely delighted with what we came in with. We do a lot of commercial vehicles and Ford just couldn’t supply into that volume.”

Founded in 1983, Peoples Group has six dealerships – three in central Scotland, in Edinburgh, Falkirk and Livingston, and three in Liverpool. The company, which is privately-owned with institutional shareholders, is ranked 55th by turnover in the Automotive Top 100 in the UK. Grant Thornton’s “Scotland Limited 2022” ranks Peoples as the 33rd most successful privately owned business in Scotland. The group’s headcount dipped over the year, from 363 to 356. However, pressures from the cost-of-living crisis saw overall staff costs jump by almost £1m to just over £15m.

Reflecting on the four decades since founding the business, Gilda said he was “beginning to feel the 40 years”. “There is so much happening in the industry. Everything is changing, nothing stays the same,” he added. “The [current financial] year has started fine. I’m not presuming that we are going to hit the big numbers this financial year but we’ll see.”

He said Ford was fortunate to have “leading edge products” such as the Mustang Mach-E all-electric car, the Puma, Focus and best-selling Transit van. The last Ford Fiesta rolled off the assembly line this summer, marking the end of an era for a model that sold 22 million vehicles globally.

Gilda said: “When the day came and they said this is the last one to come off the production line I very nearly cried. Everybody that I know has had a Fiesta. We will still be selling used ones for a long while but what a great product it was and I’m sad to see it go.”

Scotland will have to delay ban on new petrol car sales after PM’s move – SNP