Shutdowns to cost European auto industry £29bn – GlobalData
After a period of sweeping announcements by European automakers that they are halting production at European plants for several weeks, Calum MacRae, automotive analyst at GlobalData, has quantified potential effects on industry forecasting.
“Analysis based on GlobalData’s latest European light vehicle production forecast suggest that in the six-week period from the beginning of March to 26th April over 1.3 million light vehicles will be removed from production.
“That’s the equivalent of what four average-sized car plants would expect to manufacture in a year. Or taking the average value of a new car at some £22,000 it amounts to £29.3bn in lost revenues.
“The COVID-19 coronavirus is cutting a swathe through the economic and social fabric of the world and bringing incalculable human cost. Indeed, it is presenting an economic crisis few expected to see again in their lifetimes after the 2007/8 global financial crisis.
“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.
“Thus far, 95 out of 103 light vehicle production plants in Europe have announced production stoppages to some degree.
“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.”