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Coronavirus takes toll on European supply chains and business

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In the English midlands — the heartland of the UK car parts industry — the economic impact of the global sales slump triggered by the new coronavirus is already being felt.

In one factory near Birmingham, which makes parts for cars and aircraft sold around the world, the spread of COVID-19 has disrupted a complex supply chain.

Cube Precision Engineering, which makes parts for Jaguar Land Rover, recently had to scale back production.

“Some of the materials come from the Far East, some from mainland Europe, some of the places that are currently on lockdown," explains Neil Clifton, managing director. "And if we can’t get that material in, we can’t ‘machine it’ and we can’t add it to the tools and sell it to our customers. That’s going to decrease our revenue and it certainly puts us under some pressure.”

It it not just the car sector that’s been struck by the coronavirus. In Wales, Dyfed Steels is also dependant on China for much of its metal.

“We buy from Europe, China, all over the place," says spokesman Matthew Price. "With the coronavirus now some contracts have gone to reduced quantities, they’ve halved some have even gone to a quarter of the quantity.”

But it is the slow down in manufacturing across Europe which has been felt most in the UK. David Bailey, a Professor of Business Economics at the University of Birmingham, thinks poor sales and the COVID-19 virus could mean a perfect storm for UK businesses:

“When the coronavirus hits, this is ‘perfect storm part two’ – as it were. So, yet more uncertainty for them and potentially disruption both from sales, the demand side, but also potentially from the supply side and supply chains not being able to get the components to where the cars are made.”

Watch Good Morning Europe's report in the player above.

Journalist name • Joao Vitor Da Silva Marques

Video editor • Joao Vitor Da Silva Marques