European car plants reopen, with output well below capacity

London – Most European auto assembly plants have reopened after weeks or even months of inactivity under coronavirus lockdowns, but few are operating at anything close to full capacity, automakers and analysts say.

Among the reasons are safety measures to prevent the further spread of the virus, little visibility on demand and the need to draw down existing inventories that swelled when dealerships closed.

Volkswagen Group says that all of its factories in Europe are open and are running at 60% to 90% capacity. All of Renault Group’s factories are running again, including in Morocco and Romania, but some have gone 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% of assembly plants in Europe were operating, at an average of 50% capacity. 

“It will be changing all the time,” he said 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 utilisation rates will be well below 50% this year. 

When Renault Group negotiated a back-to-work agreement with unions, for example, it built in flexibility to add shifts and 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 this summer.
 
Varied production rhythms

As of mid-June, automakers reported their production rhythms in varying degree of detail. Among them are:

•    Jaguar Land Rover: All factories open, starting with one shift, with the exception of Castle Bromwich in England, which builds the Jaguar F-Type, XE and XF and could possibly re-open in August.

•    Nissan: Its plant in Sunderland, England, is up and running but with only one line operating on a single shift, to build the Juke and Qashqai SUVs. A second line is expected to open next week, and a second shift could be added at the end of the month.

•    Renault Group: All factories are open, including in Morocco and Romania, but with anywhere from one to three shifts depending on demand.

•    Volvo: The Ghent plant is back to full output of about 1,000 vehicles a day, on three shifts. TIts factory in Torslanda, Sweden, is still ramping up to full output of 1,250 vehicles a day.

•    Volkswagen Group: All European plants are operational at 60% to 90% capacity. Seat’s factory in Martorell, Spain, is building the Ibiza and Arona on two shifts rather than three; the factory also builds the Audi A1, which will be back to the usual two shifts by the end of June.

•    Bentley: CEO Adrian Hallmark said the luxury automaker’s factory in Crewe, England, is running at 50% capacity to respect 2-metre social distancing rules.

•    Fiat Chrysler Automobiles: The factory in Pomigliano, Italy, that builds the Fiat Panda is working at pre-coronavirus rhythm of two shifts, as is the factory in Tychy, Poland, that builds the Fiat 500 and Lancia Ypsilon. But FCA’s factory in Serbia is closed until 29 June, and Jeep production at the Melfi, Italy, factory has halted until 30 June. Alfa Romeo’s factory in Cassino, Italy, was briefly open but has closed until 30 June.

•    Hyundai-Kia: Hyundai’s plant in Nosovice, Czech Republic, is running on two shifts instead of three. Kia’s factory in Zilina, Slovakia, is operating on two shifts instead of three until the end of July.

•    Daimler: Mercedes-Benz said that all of its assembly and powertrain plants “gradually resumed” production starting early this month, with a “flexible” ramp up “to react to current developments and country specific regulations.”

The direct impact on employment varies by company, but overall some 44% of Europe’s 2.6 million-person automotive work force has been affected, European Automobile Manufacturers Association (ACEA) said, with more than 550,000 in Germany alone. 

ACEA estimated earlier in June that at least 2.5 million fewer motor vehicles will be built in Europe this year, including passenger cars, buses and trucks. Germany, Europe’s largest producer, will lose at least 615,000 units, and Spain more than 450,000.

The average plant showdown 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.