As disruption from Covid-19 spreads, only some low-volume producers will remain open

This article is more than 5 months old

This article is more than 5 months old

Every major carmaker in the UK and Europe is suspending or cutting production as the disruption from the coronavirus outbreak spreads – with only lower-volume manufacturers such as Aston Martin keeping factories open.

Jaguar Land Rover (JLR) and Bentley Motors have become the latest British carmakers to suspend production at their UK factories.

In Sweden, Volvo announced on Friday that it would close its factory, the last remaining high-volume plant in Europe, from 26 March.

Europe’s lockdown has disrupted global supply chains, and massively reduced demand in all key markets is thought by most analysts to be all but certain.

As the European outbreak has worsened carmakers have also had to examine the health implications for their workers.

However, Aston Martin Lagonda has not yet announced a shutdown of its UK car assembly plants and has said its plants at Gaydon in Warwickshire and St Athan in south Wales have the parts to remain open until early April.

The carmaker last week asked for another £20m from the billionaire investor who led a bailout in January as it struggled with pressures on its cashflows. Analysts said that extended demand slumps in the US, UK and Asia could add further pressures.

Ford has also kept open its three UK factories, which make engines and transmissions although the US carmaker’s continental European plants are closed.

Lotus, the British sportscar brand owned by China’s Geely, has also opted to keep its Norfolk factory open.

In contrast, every large-volume plant has closed. Vauxhall owner Peugeot, Nissan, Honda, BMW and Toyota have all suspended production at various factories in the UK and Europe.

Across Europe Volkswagen, Mercedes-Benz owner Daimler, Fiat Chrysler Automobiles and Renault have done the same.

JLR and Bentley both said production at their plants would not start again until 20 April at the earliest, with the restart dates under continual review. Staff at both companies will still be paid.

JLR, which is owned by India’s Tata Motors, is the UK’s largest manufacturer of cars, with 35,500 UK employees. The closure affects its main car assembly sites at Castle Bromwich, Solihull and Halewood, as well as engine manufacturing at Wolverhampton. Non-manufacturing employees will work from home.

Bentley, which is owned by Volkswagen, the world’s largest carmaker, said that while production was suspended “core business functions” would continue at its Crewe headquarters, with social distancing measures and remote working.

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The disruption to the industry is also hitting the US. The Detroit carmakers, General Motors, Ford Motor and Fiat Chrysler, have negotiated rotating shutdowns with union representatives to protect workers, while Tesla will shut down production in California, after facing criticism for defying local authorities’ emergency orders.

While Europe is shutting down, the hopes of the industry are focused on China, where some factories are reopening and loosening limits on movement has released some demand.

Jaguar Land Rover’s Chinese joint venture restarted production almost a month ago, and on Friday Volvo said:

“Today’s showroom traffic is indicating a return to normal in China’s car market.”