COVID-19 | European automakers restart production; here’s a global outlook of the auto industry

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The automotive industry across the world suffered and came to a standstill as the spread of the COVID-19 pandemic hammered the sales and hence the production and supply of the vehicles and respective elements.

Owing to the the complete lockdown that has been implemented in most countries across the world, the industries have taken a beating due to the inactivity.

However, few countries are seeing the light of the day through cracks as the industries restart their activities.

Volkswagen restarted production at its Wolfsburg factory in Germany on Monday, the latest of a fleet of European carmakers to take advantage of eased coronavirus lockdown rules to resume manufacturing.

Encouraged by a fall in infection rates, Germany has allowed small retail stores to reopen, provided they adhere to strict distancing and hygiene rules. Now large corporations are following suit.

BMW, Daimler and VW are banking on Germany’s ability to trace and contain the new coronavirus, and a healthcare system capable of extensive testing to identify possible carriers of the disease.

This stands in stark contrast to the United States, where the head of the United Auto Workers union said on Thursday it was ‘too soon and too risky’ to reopen auto plants in early May, citing insufficient coronavirus testing.

However, Detroit automakers target May 18 to open up again as per Wall street Journal.

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European factories have changed work patterns to incorporate more rigorous hygiene and cleaning intervals as well as more generous spacing between workers.

BMW says it is cranking up engine manufacturing starting this Monday. BMW wants to reopen its British plant in Goodwood and its Spartanburg, South Carolina on May 4, followed by Dingolfing, Germany and San Luis Potosi in Mexico on May 11, depending on market demand, the automaker said.

Other plants in Leipzig, Regensburg, and Rosslyn South Africa will open after May 18, starting with a one-shift system the carmaker said. BMW’s factory in Shenyang, China has been producing since February 17.

Mercedes-Benz plants in Sindelfingen and Bremen are also making preparations to ramp up production.

Germany, unlike Italy and Spain, never banned their car production per se, even though factories came to a standstill after authorities restricted the movement of people and ordered the closure of car dealerships, hitting demand.

Fiat Chrysler opened its Sevel plant in central Italy on Monday, with plans to resume production at a rate of between 70%-80%.

In France, Toyota this week restarted an assembly plant in Valenciennes and Renault began producing engines at its factory in Cleon, west of Paris. It will be followed by Renault’s Flins plant, west of Paris, where only 25% of the workforce is due to resume work.

Sweden’s Volvo Cars reopened its Torslanda factory this week after overhauling its production processes.

Meanwhile, Jaguar Land Rover has plans to gradually resume production from May 18 starting with manufacturing plants in Solihull in the UK as well as in Slovakia and Austria. The company’s joint venture plant in Changshu, Chin had already begun operations since the middle of February. The company is in fact beginning to see recovery in vehicle sales and customers are returning to showrooms.

Aston Martin had announced that it plans to restart its St Athan factory in south Wales on May 5 and will also resume operations at Gaydon later, after the coronavirus-led shutdowns forced the luxury car maker to suspend production at both sites in UK.

The company also announced pay cuts of between 5% and 35% for its senior leadership team last week, with new boss and Formula 1 team owner Lawrence Stroll electing to receive a nominal salary of 1 pound per annum.

Meanwhile, Italian motorcycle brand MV Agusta is ready to gradually resume operations in Italy, after the company announced a temporary halt in its production activities on March 26. Now, MV Agusta says the company is ready to gradually return to operations, although under some restrictions.

According to MV Agusta, the company took the opportunity of this temporary total time out to perform a new sanitization of all workspaces and refine its work processes. With some office employees now in smart work mode, and the spare parts warehouse in full activity to guarantee worldwide customer support, MV Agusta is now ready to resume full production as it is determined to carry out its ambitious five-years industrial plan, the statement added.


The lockdown has not only taken a toll on sales and production last month, but exports too have remained subdued.

Overall, the industry has recorded a decline of 24.51% in exports while the passenger vehicle (PV) segment witnessed exports going down by as much as 44.24%. Export of passenger cars went down by 59.64% while Utility Vehicle segment witnessed a growth of 8.75%. Export of vans slumped by 85.69%. (All figures in comparison to last year, same month).

Auto sales in the domestic market went down by 44.95% in March 2020 selling 10,50,367 units last month as compared to 19,08,097 units which were sold in the same month a year ago.

The overall industry witnessed a decline of 33.61% in production at 14,47,345 units as compared to 21,80,203 units manufactured a year ago.

Meawhile, on a positive end, auto manufacturers like Skoda-Volkswagen, Renault and MG Motor India have assured its employees that there will be no pay cuts or job losses due to the crisis.

According to a report from ETAuto, the carmakers gave assurance to the employees that they won’t be taking this step even though COVID-19 pandemic has affected business plans as well as cash flows.

Moreover, Skoda-Volkswagen India Private Limited confirmed that it would continue to hire in India despite the Coronavirus crisis.

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