A LONG-term recession is both unlikely and unnecessary – if businesses ignore the normal hard-line approach of financial directors, according to automotive sales expert, Fraser Brown.

Fraser Brown, who founded automotive retail solutions provider MotorVise in 2014, argues that during a normal recession, financial directors cut hard and fast to maintain profits and minimise losses but this is not the right route when dealing with the fallout of coronavirus.

Mr Brown said: “The answer lies in the way businesses are managed and changing the pre-conceptions of how we deal with such a situation.

“The thing that will lead us into a totally unnecessary recession is if we allow the financial directors and accountants to run our businesses as if this was a normal downturn by slashing marketing budgets and cutting staff.

"If we follow this approach, then we engineer not only a recession but a depression of our own making.

“Downturns are normally caused by fundamental economic problems, but this was triggered by a pandemic and demands a different response if we are to avoid a recession created by a lack of consumer confidence."

The man, whose business is based in Colburn, near Catterick, North Yorkshire, said that, along with other sectors, car dealerships had suffered an immediate pause of revenue when lockdown was imposed in March.

However, with government support and bounce back loans, many have found themselves in a better cash position than normal once restrictions eased..

“Not everyone is running out of cash," he added.

"The economy was temporarily halted, restarted and sustained using government funds, meaning consumer demand will remain and a long-term recession is neither likely nor necessary.

“In the automotive sector, those businesses that came back on July 1 and turned on their marketing activities, bringing back all their salespeople, have experienced a spectacular recovery – to around 180 percent of normal order take.

“The owner of one billion-pound turnover business told me they will have recovered their lockdown losses within two months of reopening and return to normal profit levels by September year end.

“When a business is closed it is right to cut costs. But when it reopens it must abandon spending restraints.

“The danger is that we self-perpetuate a recession that is not based on fundamental economic issues.

"The economy is not short of cash and the only way there will be a major issue with unemployment is if we begin laying people off before knowing the actual market demand for each of our business products and services.

“Half opening a business will only result in reduced revenues, causing further cost-cutting. I urge all business to fully reopen whenever regulations allow and to offer a full service and watch clients return. They should not make any cuts unless there are specific circumstances that are fundamentally impossible to safely overcome in the current circumstances.

“Let’s hold our nerve, invest in marketing, drive demand and let the economy recover before being tempted to slash fundamentally sound enterprises.”