car manufacturing

Automaker output plummets after coronavirus lockdown

UK car manufacturing saw a 41.8 per cent fall in March, with 5,219 units leaving production lines and an estimated £8bn fall in revenue, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).

In a survey of manufacturers, the SMMT found that over 42 per cent of respondents believe a full recovery from the coronavirus crisis will take them at least 12 months, with a third (37 per cent) expecting a loss in revenue of 30 per cent or more by the end of 2020.

Vehicle exports declined by 40.6 per cent as the coronavirus pandemic caused mass business closures and reduced consumer confidence across the planet.

The sector is Britain’s biggest exporter of goods and employs more than 800,000 people. Factories and dealerships began to close from mid-March onwards, with only some setting reopening dates for May.

Mike Hawes, SMMT chief executive, said: “The foundations of UK commercial vehicle production are strong, but manufacturers have been hit hard by the pandemic and factory shutdowns are costing the sector and economy billions.

“While many businesses have stayed open to ensure continued production of parts so that essential vehicles can stay on the roads to support nationwide response, we need to get all production lines rolling and delivering for the economy again.

“This means implementing a package of measures that supports the entire automotive industry, from retail through supply chains to vehicle manufacture. This should be seen as long-term investment into the underlying competitiveness of a sector critical to the health of the UK economy and the livelihoods of thousands of households right across the UK.”

The total value of production lost between the shutdowns introduced in March and plants re-opening in mid-May stands at around £8.2bn, according to a forecast by AutoAnalysis. Carmakers remain hopeful of being able to recoup at least some of the lost sales.

Aston Martin is due to open its Welsh factory next week, which is building its crucial first sport utility vehicle (SUV), while output at Bentley’s factory is due for a phased restart from May 11.

Jaguar Land Rover, Britain’s biggest carmaker, will restart production at one of its domestic car factories from May 18, while Nissan - which operates the country’s largest automotive factory - has begun piloting safety measures, although it has yet to say when the site will resume output.

Last week, the SMMT posted figures showing that nearly 20 per cent of all new cars that joined UK roads last year were either fully electric or plug-in hybrid vehicles, a record high.

Meanwhile, Tesla CEO Elon Musk has described the stay-at-home restrictions in the US as “fascist”, as the electric carmaker posted its third quarterly profit in a row.

One of the biggest disruptions to Tesla has been the government-ordered shutdown of its factory in Fremont, California, which has sat idle since March 24, with stay-at-home orders officially running until at least May 31.

On a conference call to analysts on Wednesday, Musk said he did not know when Tesla could resume production in California and called the state stay-at-home order a “serious risk” to the business.

Musk ranted: “To say that they cannot leave their house and they will be arrested if they do, this is fascist. This is not democratic, this is not freedom. Give people back their goddamn freedom!”

Musk is expected to receive a gigantic windfall shortly of approximately $600m, as the first instalment of his 12-part $55bn stocks and shares compensation package from Tesla kicks in. The timing could prove awkward for Musk, coming as it will during a time of worldwide economic upheaval, company closures, employee furloughing and job losses triggered by the pandemic. 

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