UK car industry on precipice
Britain’s automotive industry may never recover from the coronavirus crisis with more than two-thirds of the country’s vehicle production on-hold, experts warn.
Honda, BMW and Toyota joined a lengthening list of marques halting European operations on March 18 leaving Jaguar Land Rover – the country’s biggest car maker – as the only one still operating plants there.
The latest closures mean the Covid-19 outbreak has temporarily stopped production lines at plants that employ about 20,000 workers and make more than one million of the UK car industry’s annual output of 1.5 million vehicles.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, believes the industry “stands on the precipice”, while automotive experts are voicing concerns the industry, already struggling to avert decline, may not regain lost ground when the outbreak is over.
“Last year, with the uncertainty over Brexit, the shift away from China [amid falling sales] and diesel, it was the perfect storm,” says Prof David Bailey, of Birmingham Business School.
“This is perfect storm part two. As assemblers shut down, it has a cascade effect on the supply chain and some of those firms will have to shut too. If capacity is lost because of shutdowns, the longer they go on the more there’s likely to be a permanent impact on an industry already struggling.”
About 20,000 car workers have been sent home temporarily across the UK, while Mercedes-Benz parent company Daimler, Volkswagen, Ford, Fiat and Peugeot have announced broader suspensions of European output. Jaguar Land Rover has kept its UK sites operating but frozen output at its Slovak factory.
The suspensions announced on March 18 affect Honda’s Swindon plant, already earmarked for closure in 2022, BMW’s Mini plant at Cowley in Oxfordshire and Toyota’s plant at Burnaston in Derbyshire, pictured above. These sites employ more than 11,000 staff and produce more than 500,000 cars annually.
Oliver Zipse, chief executive of BMW, say the interruption is expected to last until April 19, while Honda’s will run until at least April 6. BMW says profits this year would be significantly lower due to interruptions at plants that accounted for half of the 2.6m cars it built in 2019.
Toyota has stopped output at more of its plants in Europe and Asia, including factories in Poland, the Czech Republic and Turkey.
Jaguar Land Rover, which has plants at Castle Bromwich, Solihull and Halewood, is yet to stop work at UK factories, although work at Nitra in Slovakia will be suspended. The fresh suspensions come a day after Nissan closed its factory in Sunderland, the UK’s biggest car plant.
