The SMMT and VDA have released figures that demonstrate the hit to car output in March for the UK and Germany.
COVID-19's impact is being felt acutely by the automotive sector globally. Demand is in freefall, while plants have had to cease operating due to a combination of lockdowns, safety fears, supply chain disruption and the aforementioned market weakness.
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Figures released by the SMMT, the UK's industry body, show that car output fell 37.6% in March on year ago levels. That amounts to a decline of 47,428 units equal to $1.3 billion in lost revenue. The figures correspond to calculations made by GlobalData that forecast 50,000 units being lost from schedules in March due to shutdowns. What's more, figures from the VDA – the German industry's trade association – show output there fell at a near identical rate of 36.5% with 165,705 fewer cars produced.
While March's figures look bad, worse is to come in April as shutdowns were for the whole month rather than just partial as they were in March. For the UK, GlobalData expects – accounting for a shutdown week at Easter – that 97,000 fewer vehicles than might have been expected will be lost. This would bring the total cost of loss production for the UK industry to $3.97 billion.
For Germany? GlobalData estimated that 263,000 fewer vehicles will be produced there than would have been according to normal schedules. The cost of this racks up to $7.2 billion, bringing a combined revenue loss for Germany's auto industry in March and April of $11.8 billion.
Thankfully both gradually seem to be emerging from their COVID-19 induced paralysis with factories tentatively beginning to start operations. In many cases this will be with shift cuts and reduced line rates in order to maintain safety protocols. In the near-term there will still be a dent to production expectations. Additionally, as we move into May we'll begin to get a sense of the latent vehicle demand that's out there and whether government sponsored incentive programs to kickstart demand will be necessary.
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