Coronavirus: what's it doing to the car industry?
Factory shutdowns, staff working from home and event disruptions: we round up how coronavirus is impacting the car industry and its workers
Almost no corner of the world is untouched by the coronavirus. The COVID-19 pandemic has been described by the UK Prime Minister as “the worst public health crisis for a generation.”
The wellbeing of friends, family members and fellow human beings is clearly the first concern, but after that the global economy, which influences and underpins so many aspects of modern life, must be considered.
The car industry, as one of the most international and interconnected industries in the world, is perhaps more exposed to the effects of coronavirus than many other businesses. We saw in February, for example, that sales of new cars in China fell by an unprecedented 79 per cent as shoppers stayed in their homes, and dealerships closed their doors while a nation sheltered from the new illness.
Here, we look at the impact coronavirus is having on the car industry, taking in everything from how factories, dealerships and businesses are affected, to which events have been cancelled, and how car makers are offering their services to help in the fight against the virus.
You won’t find any health information here - visit the Government’s official pages for that - but you will find an overview of how one of the largest, most global industries is being impacted by the coronavirus...
Over 1.1 million European automotive industry jobs have been affected by coronavirus so far
At least 1,110,107 jobs in the European automotive industry have been affected by the coronavirus pandemic so far, according to data from the European Automobile Manufacturers’ Association (ACEA).
The figures refer to Europeans - including Britons - directly employed by car, truck, van and bus manufacturers, who have been affected by factory shutdowns caused by COVID-19. The wider impact across the whole automotive supply chain is thought to be even more severe.
Some 1,231,038 vehicles that would have been produced have not been due to the coronavirus, with the average shutdown duration currently standing at 16 working days.
The European automotive industry provides 2.6 million direct manufacturing jobs, with 229 vehicle assembly and production plants operating across the continent. The wider automotive sector provides indirect and direct jobs for 13.8 million people in Europe.
Eric-Mark Huitema, director general of the ACEA, said: “Right now, the primary concern of ACEA and all its members is to manage the immediate crisis facing the auto industry, which has essentially come to an abrupt halt - something the sector has never experienced before.
“Our first priority is to protect the health and jobs of the almost 14 million Europeans who work directly or indirectly in our sector."
Car industry building ventilators
A number of automotive firms, including seven Formula One teams and the Ford Motor Company, have joined the Ventilator Challenge UK Consortium, which is made up of manufacturers who have pledged to build ventilators for the NHS.
The Mercedes Formula One team has already worked with University College London to create a breathing aid that will keep some COVID-19 patients from having to go into intensive care. The device has been approved by the Medicines and Healthcare products Regulatory Agency.
Mike Hawes, chief executive of the SMMT (Society of Motor Manufacturers and Traders), has also pledged further support from the UK automotive industry. He said: “The entire sector stands ready to help the national effort in every way possible, from production of critical medical equipment, to supporting delivery of essential supplies, maintaining emergency service vehicles and providing transport for key workers to support the most vulnerable in our communities.”
Italy is the country most heavily affected by the coronavirus outside of China, with the whole country essentially being locked down as health officials attempt to contain the spread of COVID-19.
It is perhaps unsurprising, therefore, that Italian car makers are taking precautionary measures against the disease. Fiat Chrysler Automobiles (FCA), the largest manufacturer in Italy, has confirmed the closure of “the majority” of its manufacturing facilities, not just in its home country, but also in Serbia and Poland. FCA’s plants will be closed until 27 March. The famous Italian supercar brands Ferrari and Lamborghini have followed suit.
FCA says its factory closures are being done “to enable the Group to be ready to commence production promptly once market conditions allow.” The firm is also encouraging office employees to work from home, and is increasing cleaning measures across its workplaces.
Beyond the Italian manufacturers, Groupe PSA has announced the closure of all its sites in Europe manufacturing Citroen, Peugeot, DS, Opel and Vauxhall models until March 27. This includes the Luton and Ellesmere Port Vauxhall plants in the UK as well as factories in France, Spain and Slovakia.
Volvo has also announced plants in Belgium and Sweden will be closed to deal with the virus. Bentley has closed its production plant in Crewe. Adrian Hallmark, CEO of Bentley Motors, said the closure "will inevitably have an impact on our deliveries to customers", but added "the well-being of our colleagues is our number one priority".
Volkswagen, meanwhile, is suffering supply chain disruptions and has confirmed it will close production at selected plants across Spain, Portugal, Slovenia and Italy, according to VW CEO Herbert Diess.
United in the coronavirus fight
Ford is encouraging its office staff to work from home across the world. It has also shut Ford Dagenham and closed plants in Valencia, Romania and Germany. The American giant has teamed up with rivals General Motors and FCA, as well as the American United Auto Workers (UAW) union, to form a task force aimed at tackling the coronavirus.
Closer to home, Nissan has confirmed the closure of its Sunderland plant, while Vauxhall and Honda are in discussions with the UK Government to convert factory space to build extra medical ventilators, which are required by coronavirus victims, while Toyota UK has said it is keen to help if asked.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: “Global automotive supply chains are complex and deeply integrated so any event that causes disruption and, potentially, plant shutdowns as a result, is very concerning. We are closely monitoring the situation in China and manufacturers will be working to adapt their processes to help mitigate any potential supply issues. The immediate priority, however, must be the health and wellbeing of workers and the general public.”
One of the larger events to be cancelled due to coronavirus was the 2020 Geneva Motor Show, but this was followed by a slew of other automotive fixtures being called off. The Australian Grand Prix has been cancelled, for example, with the China, Bahrain and Vietnam Grand Prix events postponed. F1 organisers say they expect the season to begin at the end of May, but this decision is likely to be reviewed as time goes on. The 2020 Goodwood Festival of Speed has also been postponed.
Concerns over UK car sales
Given the number of events and facilities affected by the coronavirus, it is likely that the number of new cars sold in the UK will be affected. So while February’s registration data shows sales only dipped by 2.9 per cent, this was before the virus had properly taken hold in the UK, and March’s numbers may tell a different story.
The National Franchised Dealers Association does not currently have a statement on how it expects main dealers will be affected by the coronavirus, but the National Body Repair Association (NBRA) and Independent Garage Association (IGA) have released guidance for members.
The NBRA warns that it is “seeing staff reporting potential contact with the virus but feeling fine and therefore turning up to work. These staff are the most difficult to deal with as the longer a member of staff remains on site the greater the potential for contamination.
“The best preventative advice remains for employees and members of the public to be extra-vigilant with washing their hands, using and disposing of tissues etc.” The IGA also advises that employee hygiene is of paramount importance.
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