Motor industry must brace for total 'cardiac arrest'
Share this article:
Hanover, Germany - The head of German car parts supplier Continental told dpa on Friday that he expects drastic consequences for the entire motor industry if demand for cars continues to flatline due to the coronavirus pandemic.
Continental boss Elmar Degenhart said the automotive industry, key for Europe's biggest economy, was facing a series of bankruptcies in the coming months amid the worst market crisis "since 1930."
Car sales had slumped in the pandemic, causing vehicles to pile up in manufacturers' warehouses and suppliers to cancel orders.
For parts suppliers such as Continental, "the second quarter will probably be the most difficult economically in the post-war period," said Degenhart.
More widely, "the extent of the crisis is much greater than what we experienced in 2009," Degenhart said, pointing to unemployment figures in the United States and Europe.
The German government's 130-billion-euro (R2.4tr) economic stimulus package would have "some effect," Degenhart said, but criticised the exclusion of petrol cars from buyers' incentives.
"Our industry has suffered a cardiac arrest in Europe," Degehart said. "Such a cardiac arrest cannot be remedied with a high dose of vitamin C - what is needed is a defibrillator."
"If there are no clear signs of a clear recovery of the market in Europe in the summer, we fear a series of bankruptcies despite all the support measures," Degenhart said.
The industry was trying to cut costs "intelligently" and minimise layoffs, but a slow recovery would likely see the loss of many jobs in Europe and around the world, including at Continental, Degenhart confirmed.