Virus crisis not hurting local supply chain – yet

CAR companies operating in Australia remain cautiously optimistic about retaining supply of new vehicles and parts amid the escalating coronavirus pandemic, despite many brands experiencing factory closures abroad.

Multiple European manufacturers such as Volkswagen, Porsche, Mercedes-Benz, BMW, Renault and Fiat Chrysler Automobiles (FCA) have all introduced production stoppages, however Australian subsidiaries largely remain upbeat about securing supply for the time being.

Renault is one of the hardest-hit brands, feeling the full effect of the strict French lockdown that has seen 12 of its domestic plants close, while other plants across Europe remain in limbo.

However, Renault Australia corporate communications manager Andrew Ellis said the stock situation would not have a local impact for the time being.

“At this stage, Renault Australia is currently under no threat of supply,” he said. “We currently have stock of all models available at dealerships around the country.

“Obviously this is a fluid situation, and we are in constant contact with head office and will advise of any change to that situation as we receive updates.”

Models built in France include the Megane small hatch, the recently introduced Kadjar small SUV and Renault’s light-commercial vehicle range consisting of the Kangoo, Trafic and Master vans, which made up nearly half of all Renault sales in Australia last year.

The Koleos medium SUV is produced in South Korea and Renault Australia has also advised that its supply from the source factory is unaffected for now.

Mr Ellis also said Renault’s Australian arm has a strong supply of spare parts in the country, while its European parts facilities remain open to fulfil urgent orders.

When asked about the effect of COVID-19 on overall new-vehicle sales, Mr Ellis said that sales figures in March would undoubtedly be down, but was hopeful that government stimulus packages and the end-of-financial-year sales deals would help negate some of the effects of the crisis.

Compatriot company PSA and its brands Peugeot and Citroen has announced closures of a number of European plants in France, Spain, Poland, the UK, Portugal, Germany and Slovakia, with the bans in effect until at least March 27.

However, Peugeot Citroen Australia (PCA) product and PR manager Daniel Khan said only a small proportion of its spare parts come from China, where there are currently sourcing delays.

He added that while it was still too early to say for sure, the company did not see a large change in overall volume taking place over coming months.

Volkswagen Group has been clearly affected by the factory shutdown, with facilities in Germany, Spain, Portugal, Slovakia and Italy all temporarily closing its doors over the past week, which affects the majority of brands under the group’s umbrella.

Volkswagen Group Australia general manager of corporate communications Paul Pottinger said the company was constantly monitoring the unfolding situation, with dealers being advised every day, however at this stage there was no cause for concern with the brand.

He added the majority of VW Australia’s headquartered staff are now working from home, helped by advanced video conferencing software which had been implemented in the past 12 months.

VW Australia is not anticipating any delays to vehicles scheduled to arrive in 2020, however launch activities will unsurprisingly be affected.

Earlier in the week, Volkswagen CEO Herbert Diess said at the company’s annual general meeting that 2020 was shaping up to be a very difficult year, with the as-yet uncertain operational and financial challenges likely to result in “sustained economic impacts” for the European auto giant.

Mercedes-Benz Australia/Pacific had no local input to add other than that announced by its German head office on Tuesday, which announced a two-week suspension on the majority of its European production facilities.

In the announcement, the car-maker said that not all global supply chains will be able to be maintained at current levels, with the shutdown to affect both the passenger car/SUV and commercial vehicle sides of the business.

The company also stated the two-week shutdown could go on for longer depending on how the virus develops.

GoAuto has contacted other manufacturers with production facilities that have closed overseas to ascertain the impact on local supply.