Cars

Coronavirus shuts down car industry

Volvo XC60
Volvo XC60 Volvo XC60
Nissan's Sunderland plant
Nissan's Sunderland plant Nissan's Sunderland plant

AS with every other area of life, the motor industry has been dramatically infected by the Covid-19 virus, writes William Scholes.

Typically, more than 19 million cars, vans and trucks emerge from European factories annually.

But today those plants stand silent, with manufacturing suspended as auto-makers respond to a three-fold supply and demand crisis.

One of these factors alone would be an intense difficulty, but to encounter all three at once could be calamitous.

First, car plants are the final link in some of the most complex and sophisticated supply chains yet conceived.

Those chains were already stretched for those manufacturers, or their suppliers, who relied on operations in China for key parts. One major British company even resorted to flying components from China in suitcases.

But the arrival of coronavirus in Europe has brought a second, and even more profound, concern to the boardrooms of Europe's car-makers - the health of their workers.

A third element is the expected collapse in new car sales. European decision-makers will have looked at the Covid-19 effect in China, and gulped.

China is the world's largest car market, expected to shift around 25 million units a year, but sales were estimated to be down by more than 90 per cent during the worst of its Covid-19 crisis.

Though there is now some evidence that sales in China are beginning to revive, there is no reason to believe that the initial downturn in sales in Europe will be anything other than brutal.

For now, companies are suspending and pausing production as they take stock.

Some are offering to help manufacture ventilators and other medical equipment; though well intentioned, how realistic and practical these offers are remains to be seen.

Most of the press releases announcing closures also suggested that factories would resume car production at the end of this month or in early April. Such hopes seem increasingly forlorn as Covid-19 tightens its grip on Europe.

And sometimes, even for the most avowed petrol-head, there are more important things in life than cars...

Land Rover Defender
Land Rover Defender Land Rover Defender

Jaguar Land Rover said it had always believed in "going above and beyond".

"This resilience has never been more appropriate. Our global family will do everything we can to support people with the passion and capability Land Rover is so proud of.

"It’s not easy for anyone right now, but together we can and will get through this."

Ferrari
Ferrari Ferrari

Ferrari is based at Maranello and Modena in northern Italy, the front line of Europe's worst coronavirus outbreak so far.

It suspended production on March 14, with the intention of resuming this Friday. That seems a remote prospect at present.

CEO Louis Camilleri said that his "gratitude goes first and foremost to Ferrari's women and men who, with their tremendous commitment over the past few days, have demonstrated the passion and dedication that defines our marque.

"Together with our suppliers, they have ensured the company’s production. And it is out of our respect for them, for their peace of mind and those of their families that we have decided on this course of action."

Volvo XC60
Volvo XC60 Volvo XC60

Volvo said the pandemic was severely affecting it in many ways, "in the form of a weakening market, a risk for production disruption as well as concerns for the employees".

"The company's primary focus is the health and safety of all employees. Precautionary measures and travel restrictions have already been taken.

"Now, there is a need to further reduce the spread of the virus by going into a period of social distancing.

"This means production closures, working from home and taking more personal precautions."

Bentley
Bentley Bentley

Bentley has suspended production for four weeks. "This decision is based on the accelerated rate of infection by coronavirus and understandable restrictions applied, the resulting interruptions in supply chain that will soon be seen, as well as declining demand on some automotive markets," it said.

"But most importantly the decision is to protect the health of Bentley’s many colleagues, their families and communities."

Rolls-Royce
Rolls-Royce Rolls-Royce

Rolls-Royce has started a four-week closure. CEO Torsten Müller-Ötvös said the action "has not been taken lightly, but the health and well-being of our exceptional workforce is first and foremost in our minds".

"As a deeply customer-focused company we are aware that this decision to pause our production will possibly cause some discomfort or inconvenience to a few of our esteemed patrons, for which we apologise while seeking their understanding at this difficult time.”

One of the Volkswagen Group's factories which has fallen silent because of Covid-19
One of the Volkswagen Group's factories which has fallen silent because of Covid-19 One of the Volkswagen Group's factories which has fallen silent because of Covid-19

Europe's biggest car-maker, the Volkswagen Group, said that suspending production at its European plants was a response to the "impending rapid decline in demand on the automotive markets".

"Risks in connection with suppliers' supply chains are also increasing. This is due to the significantly accelerated rate of infection by coronavirus and the resulting measures taken by the authorities."

Ford Fiesta
Ford Fiesta Ford Fiesta

Ford started to pause production at its vehicle and engine factories last week.

"The action follows the World Health Organization's designation of Europe as the new epicentre of the coronavirus epidemic with the number of reported cases growing significantly in recent days and expected to continue to rise rapidly."

The duration of the suspension depends on a number of factors, it said.

"These include the spread of the coronavirus; national government and European Union restrictions on movement, including across borders; the supplier industry’s ability to supply components; and the return of customers to dealerships, many of which are now closed as part of the measures taken at a national level."

Peugeot 208
Peugeot 208 Peugeot 208

Peugeot, Citroen, DS and Vauxhall operate under the PSA umbrella. It started to suspend production last week and is another that hopes - optimistically, one imagines - to resume manufacturing on Friday March 27.

It cited "the acceleration observed in recent days of serious Covid-19 cases close to certain production sites, supply disruptions from major suppliers, as well as the sudden decline in the automobile markets" as the reasons for the move.