Volkswagen Group Planning to Stall European Production, Same for Toyota

Matt Posky
by Matt Posky

With reports of factory shutdowns now being the norm, Volkswagen and Toyota have predictably decided to idle facilities in Europe to mitigate the negative influence of the novel coronavirus. VW Group had already made plans to temporarily close assembly lines in Italy, Portugal, Slovakia and Spain. But said that the entirety of Europe will probably be affected this month.

Toyota was singing a similar song on Tuesday morning, saying it would suspend production in France and Portugal this week. Considering the sameness of these virus-related cancelations, we’ll not bore you with any recaps — you know how we got here. Instead, here’s the gist of the manufacturers’ respective strategies:

Given that Volkswagen Group was previously aiming to close facilities in the most-affected areas, it’s plan basically involves gradually closing factories in the places it believes are next on COVID-19’s hit list. According to Reuters, that begins this week with its Spanish plants, Setubal in Portugal, and Bratislava in Slovakia — it’s also stalling the Lamborghini and Ducati facilities in Italy. From there, VW says it’s going to eventually shutter the rest of its European sites. Most closures are expected to last at least two weeks.

“Given the present significant deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants, production is to be suspended in the near future at factories operated by group brands,” VW Group CEO Herbert Diess announced on Tuesday.

German unions have also decided that it’s not feasible to have line workers spaced at distances sufficient to avoid possible contagion risks. VW’s own works council likewise recommended suspending production to ensure public safety.

“2020 will be a very difficult year,” Diess said. “The corona pandemic presents us with unknown operational and financial challenges. At the same time, there are concerns about sustained economic impacts.”

With Toyota, things are a bit more fluid. The Japanese automaker has made plans to stall all production in France (where it builds the Yaris) and Portugal (where it builds the 70 Series Land Cruiser) through the end of the month. Toyota said it was suspending output at facilities in line with government guidelines aimed at slowing the spread of the coronavirus. That has similarly encouraged it to idle production in the Philippines and China — though some of those sites have reportedly reopened.

Interestingly, Toyota seems to be one of the few Japanese manufactures that isn’t suffering major supply issues. Most of its local rivals have had to alter production schedules as parts have become harder to wrangle. By contrast, Toyota’s headaches seem to stem almost entirely from government-endorsed quarantines. But we’re presuming that will gradually become an issue for all automakers.

Despite news of Chinese facilities resuming operations, many sites are reportedly running with a skeleton crew. Plenty of employees are still electing to stay home as companies are being told by their government to get back to work and prop up the ailing Chinese economy. Supply lines will remain wonky for a while until that changes. As such, we’re expecting more brands to announce factory stalls over the next few days due to parts shortages and exceptionally low consumer demand — with others closing facilities due to government initiatives attempting to cope with the pending health crisis.

[Image: U.J. Alexander/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Mikey Mikey on Mar 18, 2020

    Boredom got the best of me, so yesterday I took a drive. Some observations : Little traffic anywhere in the GTA .. Bars and restaurants are all closed in Ontario. You could land an Air Bus in the GM parking lot .Costco line ups have shrunk. Gas at .75 a litre (was 1.25 ) Hospitals and Long Term care facilities are in lock down mode. Beer, Liquor, and Pot stores all open and busy. Most interesting to this old Boomer ; "I never thought I would live to see the day where you can purchase weed anywhere, but you can't find Toilet Paper "

  • Krhodes1 Krhodes1 on Mar 18, 2020

    For me it was all the European sedans and hatches. And little British sports cars. And Land Rovers. And guess what my garages are full of now that I am in my 50's, LOL?

  • Analoggrotto Colorado baby!
  • Rob Woytuck Weight is also a factor for ferries which for instance in British Columbia, Canada are part of the highway system.
  • Ajla I guess some people were big fans of Milli Vanilli and Real Dolls (don't Google that at work) but I have a very large problem with the fake engine sounds and fake transmissions. If you turn them off does it stay off forever or does it turn back on whenever you go into sport mode?
  • Probert That X frame was a killer. No nostalgia for these things to be honest. Yup - life of the party....
  • Kjhkjlhkjhkljh kljhjkhjklhkjh starting to see the concern about how many pro Hyundai blurbs and bits are popping up on the site. It is a very detailed review and well written ...