Automotive sector

Equipment supplier Nissan Faltec presents a series of challenges in the automotive sector

A major supplier to Nissan described the range of problems facing the auto industry as it reported a sharp drop in revenue and significant losses.

Faltec Europe’s 2020 accounts show the company’s turnover fell 36% to £ 19.2million as it recorded an operating loss of £ 8.8million.

The accounts cover the period in which the auto company moved to a new base at the International Advanced Manufacturing Park (IAMP) near Sunderland, after being based in Boldon, South Tyneside.

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They explain how a wide range of factors – including Covid, the global microchip shortage, questions about the future of diesel vehicles, and layoff costs – have impacted the company’s performance.

In the accounts, director Steven Tyson said, “The company’s reported revenue showed a 36.2% decrease from the previous year. This was due to the impact of the Covid-19 pandemic which reduced sales of new calls and the introduction of new models.

“The complete suspension of all production for almost three months in the spring of 2020 (the first period of lockdown in the UK) was supported by a combination of the UK government’s CRJS (leave) program, supplemented by the UK government’s own resources. ‘business.

“Significant costs were incurred, creating a successful ‘Covid safe’ environment throughout the company and while production volumes slowly recovered in the second half of the year, the inability of the company to weaken fully its costs had a dramatic impact on the business result.

“On a more positive note, and despite some delays related to Covid, the company was able to deliver its new 12,200 square meter plant located at IAMP, and production operations began in the fourth quarter of 2020.”

The accounts add that Faltec continues to serve its biggest customer’s three European factories, but delays in introducing a new vehicle program have pushed back some expected revenues into 2021.

The company – which is part of the Japanese group Faltec, which supports European activity throughout its loss-making period – admits that it has “heavily invested” in a major client which represents up to two-thirds of its activities, and is looking for ways to add two more major manufacturers to its customer portfolio.

He added: “The longer-term effects of the Covid-19 pandemic on the global economic and automotive sector are unclear.

“Semiconductor shortages are due to the pandemic. This depressed the production volumes of all of our OEMs. The company will monitor the development of the situation.

Accounts show that during the year the company’s workforce fell slightly to 359. It received £ 1.8million from the government’s coronavirus retention program.

Nationally, auto production “fell” last month amid staff shortages due to “pingemia” and the global shortage of microchips.

Society of Motor Manufacturers and Traders (SMMT) figures released last week showed just under 53,500 cars were built in July, a drop of 37.6% from the same month last year and the worst performance in July since 1956.