Europe’s auto factories are closing. Experts fear a lost decade is…

The European automobile industry is shutting down as the coronavirus pandemic rages, and experts suggest Asian rivals could find new opportunities in the aftermath.

Volkswagen, the world’s biggest automaker, on Tuesday became the latest firm in the sector to announce the temporary closure of European plants—those in Spain, Portugal, Slovakia and Italy will shut this week, while its German factories will close after Friday. The facilities produce cars under brands including Volkswagen, Audi, SEAT, Ducati, Porsche and Lamborghini.

Other manufacturers’ moves include:

Renault on Monday shut all 12 of its French plants in accordance with that country’s very strict lockdown. “The continuity of production activities at the Group’s plants in other European countries depends on the situation in each country,” it said.
PSA Group, the parent of brands including Peugeot, Citröen, Opel and Vauxhall, on Monday announced the closure this week of plants in France, Spain, Poland, the U.K., Portugal, Germany and Slovakia, until March 27.
Fiat Chrysler announced, also on Monday, that it would suspend production at factories in Italy, Serbia and Poland, also until March 27. “The Group will make use of these stoppages to implement revisions to production and quality control protocols to benefit our customers and enhance overall productivity,” it said.
Ferrari has suspended production at its Italian Formula 1 and road car plants.

The German titans Daimler and BMW are yet to announce factory closures, though Mercedes-maker Daimler has at least postponed its annual general meeting to ensure “the health of all participants.” BMW has had to quarantine 150 workers due to an infection at a Munich factory but “our plants are running as scheduled,” said BMW spokesman Frank Wienstroth.

The ultimate impact of the coronavirus crisis on European automakers is of course yet to be determined, as is the case with all sectors—forecasts are being jettisoned all over the place.

“2020 is a very difficult year,” said Volkswagen CEO Herbert Diess as he presented the company’s financial results Tuesday. “The corona pandemic presents us with unknown operational and financial challenges. At the same time, there are concerns about sustained economic impacts.”

According to Ferdinand Dudenhöffer, an industry veteran who’s now responsible for automotive analysis at the University of St. Gallen in Switzerland, the outlook is bleak for a sector that is already being buffeted by the costs of technological change and the trade wars of U.S. President Donald Trump. Even under an optimistic scenario, which assumes no bank failures and the start of a recovery for the European economy after three months or so, he sees something of a lost decade—that the Western European market for passenger cars will return to its 2019 levels only by 2030. “If people have no money they will not buy any cars,” he told Coins2Day.

“The European car industry is facing three major challenges: first, the corona epidemic and the slump in the European auto market triggered by corona; second, the detrimental effects of the trade wars of U.S. President Donald Trump; and third, the switch to electromobility, which requires high investments,” he continued. “The trade wars have worsened the cash position, especially for the European premium manufacturers.”

“Anyone who is too focused on Europe, such as Renault, Fiat or PSA-Opel, is under particular pressure,” Dudenhöffer added. “Asian car manufacturers such as the Geely Group, Great Wall and Hyundai-Kia have the opportunity to further expand their market positions.”

Chinese auto production is heading in the opposite direction to that in Europe, given the current hopes that the coronavirus crisis is lessening there—Volkswagen noted Tuesday that most of its Chinese plants were back up and running. However, companies there too have been hit hard by the outbreak’s impact on sales. Last month, Geely saw a 75% drop in sales, and Great Wall saw an 85% drop.

Fidentiis analyst Marco Opipari told Automotive News Europe that a couple weeks of lost European production could be made up later, but “the real problem is on the demand side, people are not buying cars now, and sales volumes are expected to be very bad in March, with a real impact on automakers’ earnings.”

Meanwhile, the U.K.’s best known auto brands have also been hit by the knock-on effects of the virus at a time when many were already struggling or lowering production at their British plants.

Aston Martin has reportedly been forced to ask for an additional 36 million pounds ($44 million) in funds from a consortium led by Canadian billionaire Lawrence Stroll; the consortium had already committed 500 million pounds to trying to rescue the company. While the brand was already struggling with sales last year, the cancellation of the Geneva Motor Show—where it typically launches new models—and the delay to the latest James Bond firm—the spy traditionally drives an Aston Martin—have both boded ill for the company.

Jaguar Land Rover told British media earlier this month that, even before the virus, it was planning to temporarily shut down one plant and reduce production schedules at two additional factories. The outbreak of coronavirus in China led the company to warn of a likely hit to sales earlier this month, and potential disruptions to the supply chain for some parts. Neither company responded to a request for further comment.