COVID-19: UK car manufacturing to see major impact
Amidst the current outbreak of COVID-19, SMMT predicts that the car manufacturing sector should brace for a downward impact due to the pandemic.
Recent figures show that the UK motor industry manufactured 122,171 new cars in February, a slight drop of 0.8% when compared to January - a result which SMMT attributes to a slower demand within key global export markets.
Export figures show a demand reduction of 3.1% from the US and Asia, which resulted in fewer than 95,000 units, despite the EU seeing a 3.6% increase.
However, figures did also show an increase in domestic demand, seeing a significant climb of 7.8% with 27.172 cars manufactured for the home market.
Although the car manufacturing industry in the UK saw some increases, overall car production for the region has fallen by 1.5% year on year.
The SMMT highlighted that the figures come at a time of unprecedented challenge for the UK and its automotive industry, as nearly all British vehicle manufacturers have paused production in an effort to stem the spread of the coronavirus.
“Despite the myriad global challenges the UK automotive industry has faced in recent times, it remains fundamentally strong and February’s figures reflect that. However, these figures also reflect the calm before the storm. With UK car plants now effectively on national shutdown and many global markets closed, the outlook is of deep concern,” comments Mike Hawes, Chief Executive at SMMT.
The SMMT has predicted that the shutdown of the UK major plants to curb the impact of the outbreak, will mean the UK could produce 200,000 fewer cars in 2020 compared with 2019 - a drop of 18%.
However, SMMT also warns that if the duration of the shutdown continues for several months then the impact could be even more severe, stressing that the government must accelerate the access to emergency financial support for all businesses.
“We wholeheartedly welcome the government's extraordinary package of emergency support for businesses and workers, but this must get through to businesses now. If we’re to keep this sector alive and in a position to help Britain get back on its feet, we urgently need funding to be released, additional measures to ease pressure on cash flow and clarity on how employment support measures will work,” concludes Hawes.
SMMT figures show that the automotive industry in the UK is one of the region's most valuable economic assets, contributing roughly US$22.7bn per year to the economy. In addition the industry employs hundreds of thousands people across the country in high-skill and high valued jobs.
Despite these challenges, the entire industry is banding together in a national effort to support the battle against COVID-19. Many manufacturers are turning their production operations away from cars towards the production of medical equipment and supplies, to sustain the delivery of the essentials for the emergency services.
For more information on manufacturing topics - please take a look at the latest edition of Manufacturing Global.
SAP Whitepaper: Advantages of Intelligent Assets
A core pillar in SAP’s Industry 4.0 strategy, Intelligent Assets equip organisations to reduce downtime, empower employees and increase efficiencies across industrial equipment and manufacturing units.
In a whitepaper produced in partnership between SAP and BizClik Media Group, Rachel Romanoski, Solutions Manager, Digital Assets, SAP, dispels some of the myths surrounding asset intelligent, and shares insight into how even small investment in asset intelligence can pay dividends in minimising cost leakage and realising an asset’s potential.
As with all innovations, the ceiling for Intelligent Assets is as high as an organisation can dream, afford and implement. But Romanoski says that just a little intelligence can go a long way: “Oftentimes people think Intelligent Assets need to be the latest and greatest cutting-edge technology. They can be super advanced, such as leveraging physics-based engineering simulations to forecast potential failures, and help mitigate them. But it could be as simple as a temperature reading. You can pull a lot of simple information from most equipment, and by enhancing that data through ancillary solutions and digital capabilities, you can create that Intelligent Asset.”
One of the most immediate benefits is reducing or, in some cases, eliminating unplanned downtime. Equipment failure is one of the most common causes of disruption and can cause chaos throughout the supply chain.
“The true power of the Intelligent Asset is in changing the basic, reactive emergency work or time-based, planned maintenance and being more prescriptive and tailored to that specific asset and use case,” Romanoski says. “Ultimately, you can reduce the unplanned events that often carry a big price tag.”
"Oftentimes people think Intelligent Assets need to be the latest and greatest cutting-edge technology... But it could be as simple as a temperature reading"
Other financial benefits include stemming cost leakage and “sweating assets” to the full potential. “Maybe you can consider the lifecycle of the asset and understand whether you can push it a little bit further,” Romanoski explains. “It might be that the best course of action for a low-cost item is to run it to failure. Having this information that we collect over time empowers those people to make those better decisions, but also has a trickle down effect to building resiliency and efficiency into the entire supply chain.”
To read the full report, including insight from Intelligent Assets, Intelligent Factories, Empowered People, and exclusive insight from Dominik Metzger, the lead on SAP’s Industry 4.0 programme, CLICK HERE.