COVID-19 Coronavirus and its impact on the car industry

  • Mon,23 Mar 2020 06:12:46 PM

British Asia Network - Shahzad Sheikh

London 23 March 2020 - As all our lives and daily routines have changed dramatically for the foreseeable future, there has of course been an inevitable impact of COVID-19 Coronavirus on the automotive industry. Whilst most car manufacturers were valiantly attempting to continue production introducing new hygiene and safety precautions in their plants and facilities (which are usually impeccably clean anyway), they were ultimately thwarted by government legislated nationwide lockdowns and a lack of parts supply.

A huge number of components that go into modern cars made around the world, now obviously come from China and supply chains had already been disrupted over the last month or so. Nearly all car companies produce vehicles on a production line with a 'just-in-time' assembly process. This requires parts to be supplied directly to the appropriate point in the assembly line shortly before it's needed. This means that missing even a single component would simply bring the entire production line to a halt.

And that's effectively what's happened with almost the entire industry across the globe having shuttered the majority of its factories at least until the end of March and most likely well into April. This will obviously disrupt supplies to dealers and retailers, which means that if you had a brand new vehicle on order do expect delivery to be substantially delayed. Most car dealers have also temporarily closed their businesses.

Similarly all car shows and events, including all motorsports fixtures, have been cancelled or postponed and that also includes Formula 1. Whilst there are reports that some UK circuits are still open and running track days, there are calls for those to suspended for the time being.

GEM Motoring Assist today put out a press release urging all road users to avoid any unnecessary journeys: "We are seriously concerned at the number of people choosing to ignore government advice by heading off on excursions, days out or holidays. This is a national emergency, not a national holiday,” said GEM road safety officer Neil Worth.

He also highlighted the grim reality of the potential for road accidents putting unwelcomed additional pressure on the NHS: "We heard one example where a motorcyclist lost control and crashed off the road on Sunday afternoon in Wales. This required an ambulance, an air ambulance transfer to a hospital already at full capacity, a trauma team and significant police resources. To put this kind of additional strain on the NHS right now is beyond selfish."

Nonetheless it's not all doom and gloom as the motor industry mobilises to help with the current crisis. As demand of medical ventilators soars, Nissan has already announced it will help with production whilst McLaren is working on a new design of ventilator and Formula 1 teams along with the aerospace industry are in talks with the UK government to help produce more of the vital equipment. Meanwhile Fiat Chrysler is working on producing more face masks in Asia.

The car industry itself is also already showing signs of recovery on the horizon. Even as Volvo put out a press release last week confirming it was closing its Swedish, Belgium and American production plants, it revealed in the same release that its four plants in China had restarted production. There have also been reports that in reopened car dealerships in China, footfall has returned to about 53% of normal traffic in showrooms.

So sit tight, stay at home, stay safe, protect the NHS and together we will get through this and back out enjoying our motoring again very soon!

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