BMW, Honda and Toyota Halt Production In UK

The British car industry may never fully recover from the coronavirus crisis, according to experts, as BMW (FRA:BMW), Toyota (TYO:7203) and Honda (TYO:7267) said they plan to temporarily suspend their operations in the UK due to pandemic.

Nissan and Vauxhall have already halted their operations in the UK because of declining sales and shortage of parts, while Jaguar Land Rover is expected to close factories in the days ahead. In the US, Ford and General Motors will be closing their plants as well.

The recent shutdowns in the UK include companies that employ around 20,000 workers and produce over 1 million of the country’s annual output of 1.5 million vehicles. BMW employs around 8,000 workers in the UK. It runs Mini plants at Oxford, Swindon and Hams Hall and it also produces Rolls Royce vehicles at Goodwood.

Japanese carmaker Toyota also said it was halting production at factories in the UK, including its plant at Burnaston in Derbyshire as well as its engine plant in Deeside, from tomorrow until further notice.

The two Toyota factories accommodate around 3,000 staff, who will be put on paid leave for a minimum of two weeks.

CEO of the Society of Motor Manufacturers and Traders’ (SMMT), Mike Hawes, said the UK car industry “stands on the precipice”, as the epidemic has paralyzed the industry.

The British car industry may not fully recover after the crisis is over, according to automotive experts.

“Last year, with the uncertainty over Brexit, the shift away from China [amid falling sales] and diesel, it was the perfect storm. This is perfect storm part two,” said David Bailey, a professor at Birmingham Business School.

“As assemblers [carmakers] shut down, it has a cascade effect on the supply chain and some of those firms will have to start shutting down too.”

Prof Bailey urged the British authorities to take into consideration wage subsidies to keep workers from getting fired and losing capacity in the industry.

Manchester Business School professor Karel Williams believes it was likely the British automotive industry would return from the crisis weaker than it would have been.