The impact of the coronavirus and other issues on the global automotive sector has been highlighted in accounts from two North East firms which show significant falls in revenues.
Nissan supplier Unipres, which employs more than 1,000 people on Wearside, saw its turnover fall 44% to £116.6m last year, resulting in a £13.4m operating loss.
Meanwhile Teesside car parts manufacturer Nifco reported turnover of £47.5m in 2020, down from the figure of £65.9m seen a year earlier.
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Both companies suffered as the global automotive industry was impacted by a number of Covid-related lockdowns, coming after existing problems relating to Brexit and a big fall in sales of diesel cars.
The sector is now having to deal with a major shortage of chips for car parts, which has resulted in some of the lowest sales of new cars in decades.
The Unipres accounts describe 2020 as a ‘challenging year’ and said its growing losses were as a direct result of the pandemic.
It said its volumes fell by 41% and added that the closure of the Honda plant at Swindon left it with Nissan-Renault as its only customer.
Headcount at the firm fell by more than 100 to 1,071 during the year.
Jobs were also cut at Eaglescliffe-based Nifco, falling by 80 to just over 500 as the firm reported a ‘significantly challenging year’.
Nifco also highlighted the impact of the pandemic, and said the sector’s recovery was likely to be slow and could be held back by the microchip shortage.
But despite those issues, and a £445,000 exceptional cost relating to staff restructuring, the company remained profitable, posting an operating profit of £2.4m.
Managing director Jim Casey said: “The entire automotive industry suffered significant challenges through the unprecedented impacts of the global pandemic, leading to production disruptions for our customers around the world.
“However, throughout the year we maintained focus on operational excellence, improved efficiencies, training and customer support after implementing industry leading covid secure operations.”
Recent figures showed that the number of cars built in the UK in August fell by 27% compared to a year ago.
The Society of Motor Manufacturers and Traders said the figures were “extremely worrying” and added that “carmakers and their suppliers are battling to keep production lines rolling with constraints expected to continue well into 2022 and possibly beyond”.