A major Nissan supplier in the North East has become the latest to outline the challenges faced by the automotive sector in the pandemic and beyond.
Gestamp Tallent, which has a major site at Newton Aycliffe and employs more than 2,000 people, has released accounts for 2020 which show that turnover fell by more than £140m to £346.3m.
That led to the firm, which makes chassis and other car pars for major automotive suppliers, reporting an operating loss of £23.7m. Adding in impairments linked to other parts of the global Gestamp group, the company showed a loss for the year of £71.8m.
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Gestamp Tallent is not the first automotive company to suffer a difficult 2020 as the pandemic shut plants and led to a drop in demand. The sector has seen some recovery in recent months, but a global shortage of microchips has hampered that bounceback and led to warnings that the industry needs support.
In its accounts, Gestamp Tallent says: “The year to December 31, 2020 showed a contraction in the number of new vehicle sales in the global automotive market, predominantly because of the Covid-19 pandemic.
“The directors expect sales to remain suppressed until global vaccination programs take effect; this is because many of the company’s customers operate global supply chains. The directors expect market demand to return to pre-Covid-19 levels in 2022.
“There are significant risks surrounding future market demand to be considered by the directors. New tougher emissions regulations soon to take effect on the European market can have an impact on manufacturing practices and product costs, which presents risks to customer demand.
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“Also, now that the 海角视频 has left the European Union, there is the potential for increased tariffs and other barriers to trade with the 海角视频, which represents one of the company’s major markets.
“Turnover has decreased from 2019 due to the Covid-19 pandemic and its interruption of global markets and supply chains.
“The company’s operating result also decreased significantly. This is due to a significant impairment of one of the company’s investments and the effects of the Covid-19 pandemic.” The accounts show that the company claimed £13.5m in furlough support from the Government during the pandemic and also used a ‘voluntary pay reduction scheme’ to reduce costs.
Its staffing fell by nearly 100 during the year to stand at 2,111.
The automotive sector suffered a tough year in 2020, regionally and further afield. Companies such as Nissan, Unipres and Nifco have all reported significant falls in revenue due to production being suspended and demand falling.
Figures released last week showed that demand for new cars fell by around a quarter last month compared with October 2020.
The Society of Motor Manufacturers and Traders, which released the preliminary data, said it expects a total of 1.66m new cars to be registered in the United Kingdom this year.
That would represent a 1.9% increase on 2020.