UK automakers drastically cut output as coronavirus takes hold
The UK’s car manufacturing sector is expected to make around 200,000 fewer units this year due to the impact of factory shutdowns from coronavirus.
The Society of Motor Manufacturers and Traders (SMMT) said that production was already down about 0.8 per cent in February and the impact could be even worse if the lockdown continues for longer than expected.
Some 122,171 vehicles rolled off production lines during the month, representing a loss of just over 1,000 units compared with February 2019.
It reported that domestic demand actually climbed by 7.8 per cent year-on-year but this was outweighed by a 3.1 per cent drop in the larger export market due to weak demand from the US and Asia.
The SMMT said that UK car manufacturers were facing “unprecedented challenges” from the coronavirus outbreak which will depress global demand due to weak economies in addition to the factory shutdowns it is causing.
It said that if the shutdown were to last “for month instead of weeks” the impact will be even more severe.
SMMT chief executive Mike Hawes said: “Despite the myriad global challenges the UK automotive industry has faced in recent times, it remains fundamentally strong and February’s figures reflect that.
“However, these figures also reflect the calm before the storm. With UK car plants now effectively on national shutdown and many global markets closed, the outlook is of deep concern.
“We wholeheartedly welcome government’s extraordinary package of emergency support for businesses and workers, but this must get through to businesses now. If we’re to keep this sector alive and in a position to help Britain get back on its feet, we urgently need funding to be released, additional measures to ease pressure on cashflow and clarity on how employment support measures will work.”
UK carmakers have already been struggling with the fallout from Brexit and output started slumping soon after the 2016 vote.
The SMMT reported in June that UK car production fell by 20 per cent in the first half of 2019 due to fears over a no-deal Brexit and falling demand in key global markets.
The automotive sector is worth around £18.6bn to the UK economy and it employs more than 800,000 people across the country.
Jaguar Land Rover and Nissan alone build over half of the country’s cars at factories in central and northern England.
Some factories may be converted to produce essential medical equipment or to help provide and maintain emergency service vehicles.
US electric carmaker Tesla is also planning to slash on-site staff at its Nevada battery plant by around 75 per cent due to coronavirus.
The factory produces electric motors and battery packs for Tesla’s popular Model 3 sedans.
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