The West Midlands’ Automotive Industry in the Aftermath of COVID-19: Survival of the Fittest?

Research by Oxford Economics identifies Birmingham to be hit exceptionally hard by the pandemic
because the city, as well as the region, is heavily exposed to manufacturing and local supply
chains. The industry is already suffering from Brexit-related issues and a significant decline in sales
from China, but coupled with Covid-19, it is forecasted that multiple car plants will close (Inman,
2020). Given the interconnected nature of automotive supply chains in general, and the high
concentration of other firms that are highly dependent on the industry, the West Midlands regional
economy could shrink by 10.1%. This figure includes the automotive sector itself, which makes up
around 6% of the local economy, plus other dependent suppliers an contractors. Factory shutdowns
and interruptions to supply chains, alongside a significant decline in demand for new vehicles,
means that the sector will take a long time to recover and there are likely to be a growing number of
lay-offs and possibly bankruptcies along the way.