The Polish automotive sector has been the worst-hit domestic sector in the coronavirus pandemic. Given that exports drive manufacturing, it's hardly surprising.
For most of April, passenger car production was on hold after the suspension of factories at Fiat Chrysler, Opel (Peugeot-Citroen) and Volkswagen, all of which suspended production in the second half of March. In March, only 20,100 cars were produced, 52% less than a year earlier.
The European Bank for Reconstruction and Development (EBRD) said the key was "Poland's high level of integration into global value chains and large exposure to trade, especially within the EU."
A report by the bank said the Polish economy would fall by 3.5% in 2020 and grow 4.0% in 2021. It noted that Poland had been resilient during the global financial crisis of 2008-09, but "would not escape unscathed this time."
Automotove sector is crucial
The automobile industry in Poland makes up a large part of the economy, accounting for about 11% of industrial production and about 4% of the nation's gross domestic product. The sector employs about 130,000 people and produces 800,000-900,000 light vehicles a year.
Toyota is one of the major players in the automotive sector in Poland. The picture shows a factory building in WalbrzychImage: picture-alliance/dpa/A. Burgi
Production of larger commercial vehicles is 70,000–90,000 units annually. Most of the sector's output is geared for export, primarily to the EU.
The majority of the sector is controlled by Western companies and financed by foreign investment. Major Western enterprises with a significant presence in the sector include Fiat, Opel, Toyota, Volkswagen, MAN (commercial vehicles), Volvo and Scania AB.
Fiat a key player
Fiat has traditionally had the strongest presence in Poland. The Polski Fiat assembly plan was set up in the 1920s and production of Fiat-licensed vehicles resumed in communist Poland in 1967. The Solaris bus and truck producer is the largest company owned by Polish investors.
Manufacturing activity in Poland fell to a record low in April. "April's manufacturing PMIs for Emerging Europe fell off a cliff and point to industrial production declining at a record pace in Q2," Liam Peach, emerging Europe economist at Capital Economics, told news agency Reuters.
Poland has announced measures worth over 300 billion zlotys ($72 billion, €66 billion) to combat the economic effects of the virus.
Poles will be allowed to go outside without protective masks from May 30. A country of 38 million, Poland has so far reported 22,074 cases of COVID-19 and 1,024 deaths, far fewer than other EU countries.
Cars and COVID-19: From shutdown to slow recovery
Although the coronavirus shutdown’s stranglehold on automakers has only been going on for a few weeks, a massive slump in earnings is already ravaging the industry. Will the slow firing up of factories rescue firms?
Image: DW
Earnings slump
At German premium carmaker Daimler, net profit fell 78% in the first quarter, bleeding the company's cash position down to a meager €617 million ($662 million). Securing liquidity has top priority now, says CFO Harald Wilhelm, as he throws out guidance for the year. Slumping demand, struggling parts supply and a difficult restart of production makes any outlook impossible, he says.
Image: picture-alliance/dpa/S. Gollnow
A 20% dive
Daimler's trucks business has been hit especially hard in the first three months of 2020, with sales slumping 20% compared with the same period last year. The company's luxury brand, Mercedes-Benz, also suffered a decline — down by 15% even though global showrooms and factories had remained open until March.
Image: Imago Images/A. Hettrich
After the shutdown
The complete halt of production at Daimler lasted four weeks, with about 80% of its 170,000 employees being out of work and sustaining themselves through Germany's short-time work scheme. Although factories have been opening since Monday (April 20), most staff will remain dependent on the state-funded wage compensation until the end of April.
Image: picture-alliance/dpa/S. Kahnert
Tentative recovery
Chinese autoworkers, like those at Honda's Dongfeng plant (pictured), have already resumed work, hoping for sales in the world's largest car market to pick up again. While in February car sales in China collapsed by 80%, there was light at the end of the tunnel in March with declines slowing to 48%. Meanwhile, all of Daimler's production plants in the country are back in operation.
Image: Getty Images/AFP/STR
Assembly lines rolling again
The world's largest carmaker by sales, Volkswagen, has reopened its factory in Zwickau, Germany, pressing ahead with the production of its ID.3 electric car. Despite a 5-week work stoppage at the plant, VW says efforts to roll out the pivotal mass-market electric vehicle this summer are still on time. Engine production at VW's Chemnitz plant though is only gradually being scaled up.
Image: Oliver Killig
Main factory sitting idle
VW's largest production facility in Wolfsburg, Germany, however will remain shuttered at least until Monday (April 27). So will its plants in Emden and Hanover. Security protocols, including heavy-duty disinfecting and cleaning, will be put in place, says VW. Where social distancing measures aren't possible, workers are obliged to wear face masks.
Image: picture-alliance/dpa/C. Stratenschulte
Melting cash buffers
At Renault in France, the coronavirus-induced shutdown has led to a massive drop in revenue, down by 20% on a decline in unit sales of more than a quarter. The slump has been hemorrhaging the company's cash reserves by about a third, but that still leaves €10.3 billion in Renault's coffers.
Image: picture-alliance/dpa/C. Ena
PSA reopening plan still missing
French carmaker PSA, including the Peugeot, Citroen and Opel brands, saw its first-quarter unit sales even more clobbered than those of its national rival. It sold a staggering 627,000 vehicles less than a year before, down 29%. So far, PSA has not given any date for reopening its European plants, citing ongoing talks with labor unions about pandemic security precautions.
Image: picture-alliance/AP Photo/J. Brinon
Auto news from the EU epicenter
In Italy, one of the worst-hit EU country in the current pandemic, the complete shutdown of all industries will not be relaxed before May 4. So the country's top carmaker, Fiat Chrysler, will continue to suffer enormous losses, already amounting to 76% fewer cars sold in March. By comparison, Europe-wide auto sales slumped by "only" 55% on average during the month.
