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Coronavirus: Carmakers slowly reboot plants in Europe after COVID-19 shutdown

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
·2-min read
SINDELFINGEN, GERMANY - APRIL 08: The Mercedes-Benz factory, where car production has been halted, seen during the coronavirus crisis on April 8, 2020 in Sindelfingen, Germany. Auto production among Germany's major car companies, including Mercedes, Volkswagen and BMW, was halted approximately three weeks ago due to consequences created by the spread of the coronavirus across Europe. Workers at the Mercedes Sindelfingen plant are receiving 80% of their wages through Germany's federal Kurzarbeit program and Daimler AG, Mercedes's parent company, is topping it up to 90%. How long this can last though remains uncertain as the number of cases of Covid-19 infection, in Germany now at over 100,000, continues to rise as does the number of deaths. (Photo by Matthias Hangst/Getty Images)
The Mercedes-Benz factory, where car production has been halted, seen on April 8, 2020 in Sindelfingen, Germany. Photo: Matthias Hangst/Getty Images

Car production came to a standstill across Europe in the middle of March, when automotive companies found their production lines paralysed by stuttering supply chains as coronavirus began its rapid spread across EU countries. Demand for new cars dried up, and governments imposed shutdowns on companies to protect workers and try and curb the spread of COVID-19.

Now carmakers are beginning to tentatively bring plants back online, with fewer shifts and strict hygiene rules in place for workers.

Hyundai (HYMTF) is re-opening its Nosovice plant in the Czech Republic, the first car factory to go back online in that country.

French carmaker Renault (RNO.PA) has started production in Portugal again, and is eyeing bringing the Romania factory back online from next week. Volvo meanwhile says it will reopen its main plant in Torslanda next week.

READ MORE: More than 1 million car industry workers in the EU affected by plant closures

Volkswagen-owned Audi is restarting its Gyoer engine plant in Hungary this week, initially with just one shift, and reportedly planning to begin car production next week.

Volkswagen (VOW.DE) chief executive Herbert Diess said on German TV at the end of March that the company is burning through €2bn (£1.7bn, $2.2bn) in fixed costs per week with plants closed, and it is barely making any sales outside China, where VW factories were reopening.

Daimler (DAI.DE) says it will reopen a few plants from 20 April, as will its rival BMW. Toyota (TM) is following suit, aiming to open both its French and Polish factories from next week.

According to the European Automobile Manufacturers Association (ACEA), as of end of March the automotive plant closures for around two weeks in Europe meant production losses of around 1.5 million cars. The ACEA also noted that the shutdown directly affected over 1 million workers in the sector.

The industry was already bruised from last year, when it caught in the crosshairs of the trade-tariff war and feeling the effects of a slowdown in the vitally important Chinese market.

In Germany, Volkswagen, Daimler, and BMW have put hundreds of thousands of workers on short-hours or sent them home.