European car brands could be on the brink of the worst financial crisis they’ve ever experienced, as the coronavirus upheaval continues to force car factories and dealerships to stay closed.
According to Autocar, new vehicle registrations have plunged across the board, with France charting a 72% drop in registrations compared to March 2019. Other European countries have yet to release their data, but the figures are expected to be similarly low, and the outlook for April looks to worsen.
There are close to 14 million people who work for the automotive industry across the European Union, a zone which has approximately 229 assembly and production facilities. About 2.6 million workers are in manufacturing, and the shutdown has cost the EU roughly 1.23 million vehicles so far.
The European Automobile Manufacturers’ Association (ACEA) has called for “strong and coordinated action” to protect manufacturers, dealers and the wider supply chain as income continues to be stifled by an unprecedented amount.
The ACEA’s director general has called for the president of the EU’s European Commission to “take concrete measures to avoid irreversible and fundamental damage to the sector with a permanent loss of jobs, capacity, innovation and research capability,” adding that the pandemic will have “grave consequences” that goes far beyond what can be foreseen.
Most car brands are still doling out cash despite not producing any vehicles. For example, Volkswagen Group CEO, Herbert Diess recently said it was burning through 2 billion euros (RM9.65 billion) a week to cover a high level of fixed cost. Employees may have to be laid off if production doesn’t restart soon.
Looking to sell your car? Sell it with Carro.
