Slow start to car production could impact NZ

Volkswagen Group says that all of its factories in Europe are open. Photo: VW Group

While most European auto assembly plants have reopened, few are operating at anything close to full capacity, and that having a knock-on effect to New Zealand.

There are increased safety measures at plants to prevent the further spread of the virus, and little demand for new vehicles.

Volkswagen Group says that all of its factories in Europe are open and are running at 60 per cent to 90 per cent capacity. All of Renault Group’s factories are running again, including in Morocco and Romania, but some are down to two or even one shift from three to reflect demand.

At the same time, however, Volvo says output at its factory in Ghent, Belgium, is back to its pre-pandemic level.

Pete Kelly, managing director at forecaster LMC Automotive, said it was reasonable to assume that about 90 per cent of assembly plants in Europe were operating, at an average of 50 per cent capacity. 

“It will be changing all the time,” he told Automotive News Europe.

Automakers “are concerned about infections, so they can’t move back to the same build rates. But they can change shift patterns, and they have some levers to pull to get back to normal,” he said.

LMC estimates that global automotive operation rates will be well below 50 per cent for 2020.

Brands such as Renault Group had to negotiate back-to-work agreements with unions, building in flexibility to add shifts plus the ability to work through the usual holiday break.

PSA’s factory in Sochaux, eastern France, where it builds the popular Peugeot 308, 3008 and 5008 models, will be working on certain Saturdays during the Northern Hemisphere summer.

Industry group ACEA estimated that at least 2.5 million fewer vehicles would be built in Europe this year.

The average plant shutdown due to Covid-19 lasted 30 days, with 41 days in Italy and the UK, where the pandemic has been most severe - but just 15 in Sweden, which was not subject to the same lockdown restrictions as other countries, says Automotive News Europe.

This could impact New Zealand’s new car market, with either delay in new products built in Europe arriving in car dealerships, or unavailability as the brands concentrate on larger markets.