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Car production in Europe projected to fall 24% in 2020
Published : 06 Aug 2020, 01:13
COVID-19 lockdowns, as well as significant coronavirus-related slumps in demand, would cause passenger car production in Europe this year to fall by 24 percent to 12 million vehicles, according to a forecast by the German Center for Automotive Research (CAR) published on Wednesday, reported Xinhua.
The gradual decline in European car production had already been observable since 2017, according to CAR. Europe's car manufacturers built up "substantial overcapacities" of 7 million vehicles, with Western Europe showing the highest overcapacities.
Since the recovery in Europe and other important export markets, with the exception of China, was "taking a long time," CAR forecast a large reduction in capacity and jobs, in particular in the Western European automotive industry.
In Germany's car industry alone, 100,000 jobs would be lost through capacity adjustments, according to CAR.
The forecast came on the same day as German carmaker BMW announced that it recorded an EBIT (earnings before interest and taxes) of minus 666 million euros in the second quarter of 2020, down from a 2.2-billion-euro profit in the same quarter last year.
BMW was the last major German car manufacturer to announced a negative result. Two weeks ago, Daimler posted a net loss of 1.9 billion euros in the second quarter. The German carmaker projected that the coronavirus pandemic would "continue to have a strong impact on developments during the rest of the year."
Germany's largest carmaker Volkswagen posted losses of 1.4 billion euros in the first half of 2020 as the company had faced "one of the most challenging" times due to the COVID-19 pandemic.
Ferdinand Dudenhoeffer, the director of CAR, said that "the road back to normality will be long and painful."
"The optimism in the car industry comes from China," Dudenhoeffer told Xinhua on Wednesday.