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Shutdowns To Cost European Auto Industry GBP 29 Billion

Shutdowns To Cost European Auto Industry GBP 29 Billion

Shutdowns To Cost European Auto Industry GBP 29 Billion

According to GlobalData’s European light vehicle production forecast, a six-week shutdown of auto factories from beginning of March to 26th April will amount to a GBP 29.3 billion loss in revenues, taking the average value of a new car at GBP 22,000. The industry will see the removal of 1.3 million light vehicles from production—equivalent to the number of vehicles four average-sized plants would manufacture in a year.

READ: Coronavirus Outbreak Reveals the Weakest Links In The Supply Chain

This comes after a period of sweeping announcements by European automakers that they are halting production at European plants for several weeks—95 out of 103 light vehicle production plants in Europe have announced production stoppages to some degree.

READ: Coronavirus Hits Automotive And Aerospace Supply Chains

“Once again, the automotive sector, as one of the most powerful economic multipliers, is at the forefront of the economic crisis. Hardly an hour has gone by in the past few days without an announcement by an automaker that it was stopping production,” commented Calum MacRae, Automotive Analyst at GlobalData.

READ: COVID-19 Forces Companies To Evaluate How They Operate And Embrace Technological Investment

“Our analysis shows how the short-term costs to the industry mount up over a six-week period. This crisis is a negative sum game across all industrial and consumer sectors and walks of life and the numbers could be set to become a whole lot worse before they become any better,” he added.

 

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