Europe’s Car Plants at 50% of Capacity
Europe’s auto production is back online but running slowly.
Even though 90% of the region’s 180 light vehicle and engine plants are open again, their combined output is only about half of capacity, according to LMC Automotive.
Volvo’s Ghent plant is at full capacity. (Image: Volvo)
Plant-by-plant production varies widely as companies grapple with the challenges of keeping workers safe during the COVID-19 crisis and matching actual output to uncertain market demand.
6-Month Sales Slide
Year-on-year retail car sales across Europe plummeted 52% in March, 78% in April and 57% in May as the pandemic swept through, according to trade group ACEA.
Deliveries last year advanced 1%, thanks to a sales surge in December. But it’s been downhill since then, in keeping of analysts’ predictions that Europe was overdue for shrinkage following years of expanding volumes.
Sure enough, ACEA reported that retail sales fell 7% in January and February, before the coronavirus forced a wave of plant lockdowns. At its peak, the closures idled some 1.1 million auto workers—more than half of them in Germany, according to ACEA data.
Now, many European dealers are more interested in selling down their inventories than placing hefty orders for more vehicles.
Mixed Production Revival
ACEA estimates the pandemic will cut Europe’s targeted production volume by 2.4 million units.
Most reopened plants are running one or two shifts rather than three and don’t expect to resume normal output for at least another month or two.
One exception is Volvo’s plant in Ghent, Belgium, which reopened with one shift on April 20. The company says the facility is currently running three shifts that produce a combined 1,000 of the company’s V40 compact sedans and XC60 crossover vehicles per day.
A few other facilities are still offline. Fiat Chrysler Automobiles plans to reopen factories in Kragujevac, Serbia, and Melfi, Italy, next week. But Jaguar Land Rover’s Jaguar sport coupe and sedan factory in Castle Bromwich, England, isn’t expected to reopen until at least August.
Europe’s rebound is off to a notably slower start than the paces we’ve seen in China and the U.S.
Paul Spadafora, chief engineer, Cadillac XT5, had, in his estimation, a fantastic opportunity as he and his team set about to develop Cadillac’s all-new midsize crossover vehicle for a number of reasons, one of which is the simple fact that this is one of the hottest segments going in the auto industry, so if you want to be in the game, you have to play hard against the likes of the Audi Q5 and the Mercedes GLE-Class.
General Motors Co. says it hopes to claim equipment and inventory from a bankrupt interior trim supplier to avoid being forced to idle all 19 of its U.S. assembly plants.
Here's an overview of the study of assembly plant productivity that gets the undivided attention of all automakers: "The Harbour Report." Although the Big Three companies are getting better, they still have a way to go. But given the levels of competition, better won't be good enough for some plants, it seems.