Volkswagen, Mercedes and Ferrari have paused production in Europe as social distancing requirements and parts supply constraints take hold.
Volkswagen, Mercedes and Ferrari have paused production in Europe as social distancing requirements and parts supply constraints take hold.

Car industry braces for virus impact

The car industry is preparing for tough months as Australia comes to terms with the coronavirus crisis.

Manufacturers including Volkswagen, Mercedes and Ferrari have paused production in Europe as social distancing requirements and parts supply constraints take hold.

And dealers around the country are already feeling the pain of reduced consumer confidence on local soil.

Australian Automotive Dealer Association chief executive James Voortman said dealerships face a rough road ahead.

"The foot traffic is starting to drastically reduce," he said.

"I've spoken to a few dealers today who said they've not had one person in the showroom.

"There's a big fear that buyers strike is going to emerge pretty suddenly and last for a while."

Volkswagen, Mercedes and Ferrari have paused production in Europe as social distancing requirements and parts supply constraints take hold.
Volkswagen, Mercedes and Ferrari have paused production in Europe as social distancing requirements and parts supply constraints take hold.

Voortman said an extension to the Federal Government's instant asset write-off scheme, which has risen from $20,000 to $150,000, could slow the rate of sales decline.

Overseas, Italian businesses are among those hardest hit by the crisis.

Hyundai shut down a South Korean plant responsible for building popular SUVs when a worker tested positive to coronavirus.

Fiat Chrysler Automobiles, parent company to a number of brands including Alfa Romeo and Jeep, has suspended production in Europe. Likewise, supercar marques Ferrari and Lamborghini have temporarily ceased production.

The French PSA Group, home to car makers such as Peugeot and Citroen, has suspended production in Europe.

Volkswagen announced plans to pause production at most of its European plants for two weeks on Tuesday. VW Australia spokesman Paul Pottinger said the company's local arm is "still trying to ascertain the effect it will have".

Mercedes-Benz spokesman Jerry Stamoulis said "it's too early to predict potential outcomes going forward".

 

A spokesman for Ford said supply of vehicles and parts from Europe, the US and Thailand "has not been impacted.

Toyota said "there are minimal impacts to Toyota's operations in Australia", while Honda has experienced "minor delays in a small number of replacement parts", but no delays in vehicle production as yet.

Similarly, Nissan Australia released a statement saying "we do not have clarity yet on the impact of the coronavirus", while BMW is "reviewing the situation on a daily basis".

There are "minimal impacts" for Lexus, while Audi said there "is currently no substantial impact on supply of our vehicles and/or our parts and products".

Mazda says production in Japan has slowed, and that "there is a risk of some parts going out of stock", but that the company is working to address the issue.

Renault Australia said it has not felt significant impact in what "is a very fluid situation" which could change quickly.

Kia Australia said there is "some risk of constraint", while sister company Hyundai said "careful management" was required on its part, and that there is "enough in the pipeline to keep us going".

Some carmakers in the UK are working with government to develop emergency plans to produce hospital equipment.

A spokesman for Holden said a similar approach in Australia was unlikely.

"We haven't been asked and no longer have any manufacturing capability anyway," he said.

Following the end of local manufacturing in 2017, all of Australia's 1 million-plus new cars sold each year are sourced from overseas factories. Around 180,000 come from Europe.


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