Pandemic set to cost car industry more than £8bn

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Pandemic set to cost car industry more than £8bn – even if factories reopen in just two weeks

By James Salmon for the Daily Mail

Published: | Updated:

The Covid-19 crisis is set to cost the British car industry more than £8billion – even if all the mothballed factories are reopened in just two weeks.

The pandemic could result in 257,000 fewer vehicles rolling off production lines this year, after output plunged by almost 38 per cent last month, an industry report predicted. 

This would cost £8.2billion – wiping out a fifth of car makers’ combined annual turnover.

The pandemic could result in 257,000 fewer vehicles rolling off production lines this year, after output plunged by almost 38 per cent last month

Just 78,767 vehicles left factory gates in March, some 47,428 fewer than the same month a year ago.

Production of engines also slumped 40 per cent last month, according to latest figures from the Society of Motor Manufacturers and Traders.

Factories hammered 

Four in five British manufacturers have been hit by a slump in orders since the Covid-19 outbreak, according to a report.

A poll of almost 300 firms found one in five manufacturers have seen their orders fall by more than half since the lockdown. 

One in five have also furloughed up to a quarter of their staff, with a third of firms waiting for an increase in orders before they take employees off the furloughing scheme.

The findings are in a report by manufacturing lobby group Make UK, which has urged the Government to extend the furloughing scheme beyond June.

Car makers began to mothball their factories towards the middle of last month – before the official lockdown was introduced on March 23. 

Industry figures published next month will confirm car production was virtually wiped out in April. 

The latest estimates of the spiralling costs of the lockdown are based on independent forecasts, and assume mothballed plants are reopened in the middle of next month.

 But with no exit strategy in sight, many believe this is optimistic.

The SMMT said the first step must be to reopen car showrooms as soon as possible. As one car executive put it: ‘There is no point in factories starting to make cars if there is nowhere to sell them.’

Manufacturers, which have furloughed tens of thousands of workers, are sending in small teams to get their plants Covid-19-ready.

Vauxhall said it has finished preparations at its Ellesmere Port and Luton plants where staff will be supplied with protective gloves, masks and overalls.

 

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