BREAKING NEWS: Hungarian Audi plant to suspend production as of Monday
Diess told a press conference in Wolfsburg today that VW factories in Italy, Portugal, Slovakia and Spain will stop manufacturing for two to three weeks due to the coronavirus outbreak. Portfolio immediately contacted the Hungarian Audi operation and asked how the decision will affect the plant in Győr.
The company replied that
the measures are affecting audi ag's operations in ingolstadt, neckarsulm, brussels, mexico and győr, as well.
Production will be gradually stopped by the end of this week in Hungary.
in practice this means that the audi factory in győr will not manufacture engines and cars as of next monday for an unspecified period.
The German carmaker, which owns the Audi, Bentley, Bugatti, Ducati, Lamborghini, Porsche, Seat and Skoda brands, said the uncertainty about the fallout from the COVID-19 pandemic meant it was impossible to give any forecasts for its performance this year.
Volkswagen’s powerful works council has concluded it’s not possible for workers at its plants to maintain a safe distance from one another to prevent contagion and recommended a suspension of production from Friday.
“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,” Reuters cited Chief Executive Herbert Diess as saying on Tuesday.
The current situation requires us to see through the announced measures and to continue to show flexibility and solidarity, commented Peter Kössler, member of the Board of Directors at Audi AG in charge of production and logistics, and President of Audi Hungaria Zrt's Supervisory Board and head of the international crisis team.
The company said it will provide further details about the production programme and the consequences of today's decision for the employees.
The automotive sector (vehicle production) has a massive weight in the Hungarian economy, contributing more than a quarter of the volume of industrial production and about 5% of the country's GDP. Due to the exposure of supply chains to the global pandemic and the virus-related demand shock the sector has been at risk from the very beginning of the COVID-19 outbreak. The risk of disrupted operations has been hanging over Audi's head for some time now.
Today's developments prove those fears correct. The stoppage of production in Győr can deal a severe blow to the Hungarian economy. The key question is, of course, whether the plant will remain inert for a few weeks or even longer. We estimate that a single month of full stop in the Győr facility could lower Hungary's annual average GDP by 0.2 percentage points.
Audi Hungaria to come to take a break after record year
In 2019, Audi Hungaria manufactured 1,968,742 engines, including 1,370,316 petrol, 508,059 diesel and 90,367 electric motors. This output largely matches the 2018 volume.
Vehicle production, however, set a new record last year, as 164,817 models rolled out of Audi Hungaria’s assembly lines.
The plant's nominal capacity is 160,000 cars per year, and output exceeded this mainly owing to the huge popularity of SUV models. Market rumours were also reassuring that the production volume could reach 190,000 this year.
In view of the above, it is extremely bitter pill for Hungary to swallow that Audi is forced to temporarily suspend production due to the coronavirus.
