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March 03, 2020 10:53 AM

Bentley, McLaren seek alternatives to China suppliers due to virus

Costas Pitas
Reuters
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    For Bentley, the sales rate in China is half what the automaker would expect because of the coronavirus outbreak.

    Bentley and McLaren have sought alternatives to their Chinese suppliers to mitigate the effect of the coronavirus outbreak, which has halted production at some automakers' manufacturing sites around the world.

    The virus has infected tens of thousands and killed about 3,000 people, the majority in China, confining millions to their homes, disrupting businesses and delaying the reopening of factories after the extended Lunar New Year holiday break.

    Both Bentley and McLaren said their car production, all of which is in Britain, had not been affected so far.

    Bentley, owned by Volkswagen Group, said it had secured the supply of the 21 basic components that it sources from China until the end of the month, such as silicon chips.

    "We have re-sourced them. We don't see a break in production yet," CEO Adrian Hallmark told Reuters. He declined to say where the alternative supplies are sourced from.

    McLaren Automotive CEO Mike Flewitt said his company was seeking to take similar steps. "We are developing some alternating sourcing opportunities where we can but we don't have multiple sources for a company this size," he said as the firm unveiled its 765LT model at an event at its Woking headquarters in southern England.

    Flewitt said McLaren had also taken steps to mitigate the risk from suppliers in northern Italy, which has suffered Europe's worst coronavirus outbreak.

    "We have restricted travel out to those suppliers and we have had to make alternative logistics arrangements so that we can get material out," he told Reuters.

    Some automakers have seen their production hit by the outbreak of the coronavirus.

    Last month, Fiat Chrysler said it was temporarily halting production at its Serbian plant, the first such suspension by an automaker in Europe in response to the outbreak in China, which had already forced closures in Asia.

    China accounted for about 6 percent of McLaren's sales last year, which stood at about 4,700 vehicles; and for 18 percent at Bentley, which sold more than 11,000 vehicles in 2019.

    Flewitt said there had been "very few sales at all" so far this year in China for McLaren.

    For Bentley, the sales rate in China is half what the automaker would expect and it risks losing some of the 200 to 250 sales from the first three months of the year, Hallmark said.

    "If we see sustained improvement by the end of the quarter, then we think we can cover that back by the end of the year," he added. "If it carries on, I won't predict numbers."

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