NEWS & TECHNOLOGY COVID-19
Covid-19 brings car production
in Europe to a halt
By TChristoph Hammerschmidt he 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 corona virus, 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 throughout 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.
If you ask in detail, you usually get trivial answers.
In many cases, the companies are afraid of
giving away something that could have an impact
on the stock price. Continental, for example, left an
inquiry from eeNews Europe unanswered. According
to press reports, however, the company regards
the temporary closure of factories as “last resort,
implemented only in extreme cases”.
As an unlisted company, Bosch can afford to
be more open. In response to a request from eeNews Europe,
the company informed that it was currently investigating the
situation together with its customers. “At this point in time, we
are largely able to maintain production and our supply chains
and meet the needs of our customers. This also applies to our
semiconductor production,” explained a Bosch spokesman.
However, he added that the situation was “dynamic” and could
change rapidly.
The lighting and radar specialist Hella reduced its profit targets
in a press release as a result of the pandemic. The company
also announced that short-time working was being prepared
at certain locations.
Semiconductor manufacturers, as tier 2 suppliers to the
automotive industry, have also been affected by the production
closures. However, they are extremely cautious about the
effects of the downstream production stops. NXP, one of the
largest chip suppliers to the automotive industry, had already
lowered its sales targets by 5% at the beginning of the month
because of the corona virus. “We cannot comment at this time
beyond our press release issued earlier this month,” a company
spokesperson said. STMicroelectronics announced earlier that
it keeps on working in Italy despite the massive lockdown in
that country.
Renesas, another big player in the automotive electronics
arena, makes the following preventive restrictions: “IF eeNews
source of information about production stops is NOT based
on the companies’ official statements or press releases, our
statement will simply be “we would like to refrain from making
comments on speculations in the reports”. Well, that the reports
about production stops are no speculation should become
immediately clear when looking at the media. Thus, Renesas is
making a statement on the matter: „As corona virus situation is
changing on a daily basis, we are communicating and confirming
the situation at each of our customer. We will continue to
closely monitor market trends in our business areas and the
16 News April 2020 @eeNewsEurope www.eenewseurope.com
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