20 February 2020
Carmakers are continuing to suffer in the wake of the Coronavirus outbreak, with Jaguar Land Rover (JLR) the latest to issue a warning over parts supplies.
The UK’s biggest automotive manufacturer operates three plants in the country, building around 400,000 vehicles a year. However, speaking at the launch of the National Automotive Innovation Centre in Coventry, CEO Ralf Speth suggested certain supplies are running out.
‘We are safe for this week, and we are safe for next week. In the third week we have parts missing,’ he told reporters. ‘We have flown parts in suitcases from China to the UK.’
It is believed the carmaker is missing 38 components for its manufacturing process, including key fobs.
Transporting parts by air is quicker than shipping; however, it is also more expensive and only possible in smaller volumes than carmakers generally require. JLR is not the only company using this tactic; electronics giant Samsung has also taken to flying components out of the country.
‘Jaguar Land Rover’s direct supply chain is primarily European and in the UK, with a small percentage in China,’ the carmaker said in a statement to Autovista Group. ‘The coronavirus may impact us in the medium term, and we are working with our suppliers to minimise any potential impact.’
JLR’s profits have recently started improving following a dramatic drop at the start of 2019, much of which it credited to a poor performance in China. The virus will likely wreak havoc with income from the region once again.
‘[Sales have] completely stopped. It's zero,’ Speth said. ‘You don't know whether the economy will catch up or whether this kind of loss is just a loss.’
Registrations plunged 22% across China last month as the outbreak gained momentum, and may sink 30% in February, according to the China Passenger Car Association.
JLR joins other major car manufacturers in warning about the impact the coronavirus may have on its supply chain. Fiat Chrysler Automobiles (FCA) has suspended production of its 500L in Serbia due to a shortage of audio components, while a lack of wiring looms has caused a halt in production of Hyundai models in Korea.
Nissan, which has a components plant in Hubei, the epicentre of the outbreak, could also run out of parts for its European and US plants should it remain closed beyond 21 February. The carmaker produces around 800 parts at the facility.
Organisers of the Beijing Motor Show have decided to postpone the event, scheduled for April, to ensure the health and safety of exhibitors and participants. The Formula 1 Chinese Grand Prix, set to take place in the same month, has also been called off.