Covid-19 brings car production in Europe to a halt

March 19, 2020 //By Christoph Hammerschmidt
Covid-19 brings car production in Europe to a halt
The coronavirus has sent large parts of the European automobile production into a coma. It is unclear how this will affect the electronics supply chain.

On Wednesday afternoon this week, Porsche announced that it will suspend production - initially for two weeks. The sports car manufacturer was thus the last in a series of automotive OEMs to stop production for the time being. The reason in all cases was to protect the workforce from the corona virus. At the same time, the carmakers are also reacting to the slump in demand as a result of the pandemic - because of the virus, customers around the world are hesitating to buy a new car.

Before Porsche, BMW had also announced on Wednesday the suspension of production in its European plants as well as in its factory in Rosslyn (South Africa). BMW plans to halt its assembly lines for four weeks. The day before, Daimler had already ordered a temporary stop of its production in Europe; not only cars, but also the production lines for vans and commercial vehicles will be affected.

Daimler is in good company with this measure. Starting this Thursday, Volkswagen plans to shut down its assembly plants in Germany, Portugal, Slovakia and Spain for an initial period of two weeks. The Spanish VW subsidiary Seat had already ordered this the day before, Audi plans to follow suit until the weekend. Only Skoda will continue production for the time being, albeit on a limited scale.

Toyota is suspending the production of cars in its European plants for an indefinite period of time. Factories in France, UK, Czech Republic, Poland and Turkey are affected. Ford is suspending operations at its production plants in Germany, Romania and Spain for "a few weeks", it says. Initially until 27 March, the PSA group (Peugeot, Citroen, Opel, Vauxhall) is suspending all its production in France, Spain, Poland, the UK, Portugal and Slovakia. Competitor Renault stops assembly for “a few days”. Fiat Chrysler stops its plants in Italy; Nissan does the same in the UK.

Have we forgotten anyone? Oh yes, Jaguar Land Rover: Magna, the contract manufacturer that among other things, assembles Jaguar’s electric model I-Pace in Austria, is sending its workers on a compulsory break until the end of March. And, finally, Volvo's production is also affected: While the factory in Gothenburg (Sweden) continues to operate for the time being, the company is closing its production in Ghent (Belgium) for an indefinite period.

In addition to the coronavirus, there is another reason why many manufacturers would not be able to continue production even if they wanted to: In many cases, supplier parts are now missing, because the car manufacturers' suppliers are also in crisis and have had to interrupt some of their production.

This abrupt standstill of an entire industry also sends shock waves through the supply chain. How are the suppliers to the automotive industry dealing with this? 

According to a report in the Automotive News Europe newspaper, the major tier 1 suppliers Bosch, Continental, Valeo and ZF Friedrichhafen announced on Tuesday afternoon that all their production facilities would continue to operate unchanged. However, all these companies said that these plans would change as soon as their customers, the car manufacturers, reduced their orders.


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