COVID-19 and Brexit put spanner in works of UK car supply chains
Brexit and COVID-19 have thrown another spanner in the works for the UK car industry as several factories have been forced to limit or shutter production.
Parts shortages and ports delays have already caused issues for the automotive industry, now Jaguar, Land Rover, Nissan (NSANY) and Vauxhall are all curbing activity supply chain issues are ironed out.
According to The Sunday Times, Jaguar is halting production of its XE and XF saloons for two weeks amid staff shortages due to COVID-19. Its Castle Bromwich factory is in Birmingham.
Extra shifts were scrapped at Nissan’s Sunderland factory because of shortages of parts at ports caused by Brexit.
The Nissan factory employs 5,750 people in the city and bosses have previously warned a no-deal Brexit would make its UK business "unsustainable." Despite a deal being reached, the company is still facing issues.
Last week, Vauxhall was also understood to have lost half a day’s production due to shortages of parts.
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In December, car bosses warned the government that car production in the UK could be shut down early in 2021. The latest issues have shown this prophecy playing out.
At the time, Steve Bush, Unite's national officer for the automotive sector, told Sky News "now is the time to worry," regardless of whether a deal is agreed or not.
He said: "Within days [of 1 January] we may potentially see an issue where production is shut and ceases because there's a backup at Dover."
Alongside Jaguar, Nissan and Vauxhall, Honda also warned last week that it would shut its Swindon factory from Monday to Thursday on account of a shortage of semiconductors.
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Figures released at the end of December showed that in the 11 months to November, total UK car production was now down 31% compared with the same period in 2019, representing a loss of 380,809 models at a cost of roughly £10.5bn ($14.3bn) to the sector.
The British automotive sector forms a key component of the national economy, turning over an annual £78.9bn and representing the country’s biggest exporter of goods at 13% of total exports.
Factories have been allowed to continue to function during the most recent national lockdown, however these new production curbs will hit hopes of a recovery.
Car production in the UK has already been a casualty of Brexit, with some manufacturers choosing to move their production elsewhere. In December, Ineos Automotive, owned by billionaire Brexit backer Jim Ratcliffe, announced it will build its first 4x4 vehicle in France, which confirmed that its plans to build a car manufacturing factory in Wales have officially been abandoned.
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