BMW and Rolls-Royce are the last two car manufacturers that have suspended work activities. The car groups have decided to shut down factories for one month and two weeks respectively. Both prudence and market reasons have driven their choice. On the one hand, we must contain the widespread Coronavirus outbreak; on the other hand, new registrations have been slowing down.
BMW and Rolls-Royce shut down
BMW have decided to shut factories in Europe and in South Africa until April 19th. Chief Executive Officer Oliver Zipse announced the closure while illustrating the achievements carried out by the German group throughout 2019. Likewise, Rolls-Royce are about to suspend production, from March 23rd, for two weeks. The two groups are just the last ones to join a big group of car companies making analogous decisions. In the States, GM, Ford and FCA have decided, after reaching agreement with trade unions, to shut factories and suspend activity for 11 days: such stop is going to affect 150,000 workers. As regards FCA, as we have previously reported, they imposed activity suspension in Europe as well. Here, for the records, PSA, Renault, Nissan and Volkswagen, among others, have set the closure of factories for precaution.
The market issue
As we said, there are two main issues to deal with. On the one hand, we must contain the widespread Coronavirus outbreak; yet, on the other hand, companies also face a market slowdown. In the meantime, the supply chain starts having a hard time since international relations are getting more and more complicated. As reported by the Corriere della Sera, in February registrations in Europe (excluding Great Britain) have been dropping, on annual basis, by 7.4%, as their number went below one million units. In China, which is one of the most important markets for the car industry, in the same month sales decreased by 80%.