The world is in the midst of a global pandemic that is not only impacting the health of individuals but brought a strain on the economy and financial markets. Several countries have initiated national shutdowns to reduce the risk of the Coronavirus spreading by banning flights from countries with high numbers of Coronavirus cases and encouraging social distancing. In South Africa, President Cyril Ramaphosa has declared a National State of Disaster on Sunday, 15 March 2020 and as of 22 March 2020, there are 240 cases reported in SA and that number is still increasing. An order was made to close down schools and universities, ban flights, cancelling large event gatherings and shutting down 35 of the national ports to South Africa which includes airports, seaports, and borders.
The question now is how will the motoring industry respond to this crisis. The National Association of Automobiles Manufacturers of South Africa (NAAMSA) issued a statement after the address by the President, stating that they are monitoring the situation and production will still continue at local production plants across South Africa. These automotive production plants include Toyota, Volkswagen, BMW, Mercedes Benz, Ford, Nissan, and Isuzu. The decision was made in order to maintain the country’s economy at a stable level as the SA automotive industry contributes 6.9% to the country’s GDP.
The total number of jobs created in the SA automotive industry is 457 000 and 30.1% of the country’s outputs and vehicle parts are exported to 155 countries, with the continent of Europe importing more of the components than any other country that SA exports to. Europe is the second continent to have the most cases of the Coronavirus being reported and this has caused several car manufacturers to close down their factories across Europe. Volkswagen Group has suspended production in Europe to slow down the rate of the pandemic.
BMW Group is planning to shut down the Spartanburg County production plant in South Carolina, USA on the 3rd of April for 30 days. And just recently, the local BMW Rosslyn Plant located in Pretoria has stopped production on the 20th of March 2020 and the management is hoping to resume production on the 20th of April 2020, depending on how the situation escalates. BMW South Africa produces approximately 80 000 units every year and 64% of the units are exported to Europe. The shut down has caused a definite decrease in the production units and might result in a loss of revenue and possible job losses.
Daimler, Nissan, and Volvo have also announced plans to close down operations in several plants close to the epidemic of the Coronavirus. Other plant employees in other automotive factories have been trained to take precautions and exercise hygiene to protect themselves. The motorsport industry has also been affected, particularly Formula One as several Grand Prix Races have been postponed. The Australian and Monaco Grand Prix have been since cancelled due to the Coronavirus fears and five other Grand Prix have been postponed which include: Bahrain, Vietnamese, Dutch, Spanish and Chinese.
Meanwhile, the Ferrari F1 Team have stopped production about a week ago at the Maranello factory fearing the safety of the workers. The team is based in Italy were the Coronavirus has hit hard resulting in more than 100 000 confirmed cases and more than 3 400 deaths in the past 6 weeks. Ferrari has announced that they will help to develop ventilators to help save the lives of the patients affected and McLaren together with Fiat are also helping to produce more ventilators. Tesla hinted that they will help with the creation of ventilators to combat the pandemic.
The Coronavirus (COVID-19) was never prepared for and many industries did not predict how much of an impact this would have. The world has literally come to a complete halt and the way we used to live our daily lives has changed. We advise you to stay well informed about the pandemic by visiting the World Health Organisation Website and your designated Department of Health website, South Africans can visit it here. Please remember to wash your hands and don’t be ignorant of the rules, stay safe and may God be with us.