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The new crown has hit the European auto industry: the market is shrinking

UNRAE, the Italy Automotive Industry Association, has predicted that the country's annual sales volume will shrink by at least 15% and its economic losses will be more than 29 billion euros.

In Europe, the global automobile manufacturing industry has become the most serious area of the new crown pneumonia virus.

Up to 24 hours in Paris on March 15th, 10214 new cases were confirmed on a single day in Europe, and 56408 cases were accumulative.

Passenger car sales plunged 81.7% over the same period last year, which is China's most serious response in February. Today, the outbreak of European countries is still in the outbreak stage. The cumulative number of cases in the region has broken through 81062 cases in China. It seems that it is only a matter of time, and the collapse of sales volume and the heavy losses of the whole industry seem to be unable to avoid repeating the same mistakes.

If European auto makers were still suffering from the collapse of the Chinese market in February and the breakup of the industry chain of BOSCH, Valeo, Delphi, and phreis in Hubei Province, the first thing Europeans need to worry about is whether their factories can be shut down in March.

European car factory closures

In Italy, Europe's most serious epidemic, FCA announced in March 11th that in order to avoid further spread of the new crown virus, it will temporarily shut down four factories in Italy, including Pomigliano, Melfi, Atessa and Cassino, for at least two days, and more than 1000 workers will have to temporarily lose their jobs. The four factories have a total annual output of 600 thousand vehicles, accounting for about 4% of the total vehicle output in Europe. Fiat officials claimed that the aim was to conduct a comprehensive disinfection of the plant area rather than the risk of breakage in the supply chain.

As for the four factories and the other Italy factories of Fiat, which have been shut down since March 16th, there is no conclusion yet. Fiat Group officials have said in London that the possibility is being considered.

However, it is clear that Fiat has decided to reduce the number of workers in the factory and cut down some production capacity, hoping to ensure that the factory workers can maintain a safe distance.

On Thursday, the Prime Minister of Italy announced that he had sealed off the country and restricted people's going out. On Friday, he announced through social media that he had reached agreement with the major auto manufacturers and their trade union organizations, and allowed factories to continue to operate in principle, but the factory must ensure that the safety distance between the employees could be maintained at 1 meters. Otherwise, factories are obliged to provide masks or other protective facilities to their employees.

Compared with Fiat's "tenacious" insistence, Louis Camilleri, another Italy carmaker's Ferrari chairman, announced in March 14th that the two factories of Italy Maranolle and Modena will be closed for less than two weeks due to the "grim" problem of supply chain and the safety of employees. Prior to March 12th, Lamborghini also announced the closure of the Italy plant until March 25th. At present, all the capacity of Lamborghini is located in Italy.

In addition, Giugiaro, a car design company in Italy, shut down all offices in Turin as early as February 24th due to staff's diagnosis of the new crown virus. Italy tire manufacturer Pirelli also announced a reduction in production in March 10th due to staff diagnosis. Brake manufacturer Brembo announced the closure of the Italy plant in March 13th; Italy's largest car dealer Autotorino will also be closed. All stores in the country come to April 3rd.

In Europe's second largest outbreaks, Spain's West sait brand is currently negotiating a reduction in Martorell production in Barcelona and trade unions because the supply chain is likely to have problems due to Covid-19. Seattle has cancelled the production of one shift in March 14th and has affected 1200 local staff. In addition, the Spanish brand Navarra factory of the Volkswagen brand also warned that the production line may be suspended this week due to tight supply chain.

In the European capital of Belgium, Audi has announced that the working hours of the Brussels plant will drop from Friday to Wednesday. Although Audi officials denied that the move was related to the supply chain problem caused by the outbreak, the factory had to temporarily suspend operations in February because of the inability to supply battery units from East Asia. The factory is mainly responsible for the production of Audi's electric vehicle type e-Tron.

The impact of the epidemic on European vehicle manufacturers is not only reflected in the production end, but also has affected the R & D and administration departments of various manufacturers.

In Germany, the European automotive industry center, BMW Munich R & D headquarters FIZ has confirmed two new crown cases a week ago, and has forced a large number of employees at R & D headquarters to receive 14 days of isolation. Audi was also diagnosed in March 12th by the headquarters of khester, and Volkswagen Group also announced three cases at Wolfe headquarters and Cassell the next day.

Though different from China's strict control over the companies with confirmed cases, German companies will segregate more than ten close contacts, but most of them still go to the company as usual. However, with most schools in Germany from March 13th to May, most R & D and administrative staff choose mobile office this week.

According to the twenty-first Century economic report reporter, at present, BMW, Audi, Volkswagen, Continental group and other auto giants have sent internal mail to all engineers on March 13, requiring employees to work as far as possible unless necessary.

Due to the restriction of the number of VPN ports of Volkswagen and other vehicle manufacturers, it is expected that in the next few weeks, the R & D efficiency of major manufacturers will be greatly reduced.

European auto market shrinks

At the sales side, the outbreak is expected to further crack down on the weak domestic market in Europe. Auto demand in the European market has been sluggish due to the stalling of EU economic growth, the problem of Britain's off Europe and the sluggish global car market.

Previously, British consulting firm LMC Automotive predicted that global vehicle sales will shrink by 4% or 3 million 700 thousand to 86 million 400 thousand vehicles in 2020, which is also expected to be the lowest level since 2013. However, the data is based on the assumption that the new crown disease can be controlled in the short term. LMC Automotive does not rule out that the global sales volume will further shrink by 200~300 million under the global pandemic.

In the February sales figures released by Volkswagen Group, the European market, which shrank by 3.5% over the same period last year, is the only one with declining sales in addition to the Chinese market. The new crown epidemic in February has not received the attention of European countries. As for the rapid deterioration of the epidemic in March, due to the fact that countries are still in a state of continuous state emergency, there is no reliable prediction of vehicle sales in this month and April. But the Italy Automotive Industry Association UNRAE has predicted that the country's annual sales volume will shrink by at least 15% and its economic losses will be more than 29 billion euros.
Compared with China's auto sales market, a new mode of online sales and live broadcasting has been developed during the epidemic season. In the European market with less developed Internet industry and relatively conservative vehicle buying group, price promotions and better loans are still the magic weapon of dealers and vehicle manufacturers.

However, these preferential conditions are very limited at the moment.

On the one hand, under the impact of the epidemic, 4S shops and experience stores have been difficult to sustain. In the context of the current rush of buying toilet paper in European countries, sales promotion is hard to attract potential car buyers. Since March 12th, the government of Italy has announced the closure of all shops and catering establishments, including the 4S store, besides supermarkets, pharmacies and other necessities. Within a few days, France, Spain, Austria, Czech and other countries announced that Italy had ordered to close down almost all stores.

On the other hand, European auto factories are worried about the unexpected consequences of sales promotion. If sales promotion is effective, the sales of internal combustion engines will become a burden. Since January 1st this year, the EU's regulations on carbon emissions for new registered passenger cars have come into effect. For every passenger car whose carbon emissions can not reach 95 grams / km, they will be fined 95 euros / gram. At present, the electrification models of the various car factories can not stir up the backbone. Whether or not to drink poison and quench thirst has become a major problem facing European automobile manufacturers.

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