As President Trump briefs the country on the spread of the virus, an update on how it’s affecting the U.S. and world’s automakers.
The coronavirus is unpredictable, and so is its impact on the automotive industry. While global automakers are still saying that their North American production and sales efforts are continuing apace, there are more and more hints that the virus is going to play a bigger role in changing the numbers in Asia and Europe.
President Trump, flanked by representatives of the Centers for Disease Control and Prevention (CDC), held a press conference on February 26 at 6:30 p.m. ET to address concern about containment of the virus in the United States. A CDC spokesman said they are working to secure funding from Congress to fight the virus in a multi-pronged plan that includes expanding surveillance, supporting state and local governments, developing therapeutics and vaccines, and gathering masks and other protective materials for public use. They did not address specific challenges to American industries.
Starting with the big picture, the Moody’s credit-rating agency changed its prediction for 2020 global auto sales on Wednesday. Previously, the agency said sales would be down 0.9 percent in 2020, compared to 2019. The new prediction is that global sales will drop 2.5 percent. The virus’s effect on auto sales in China could be bigger. Moody’s adjusted its prediction that sales in the country where the first case of the virus (now known as Covid-19) was discovered would increase by 1 percent this year to expecting a 2.9 percent decrease in 2020.
That’s the overview. Zooming in to locations around the globe, we can see how smaller incidents could still play a big role in the coming weeks. MTA Advanced Automotive Solutions, a supplier for a number of automakers that build cars in Europe, announcedyesterday that because Covid-19 was confirmed in Codogno, Italy, where MTA has a production plant, the plant would be shut down for an undetermined amount of time. The plant’s 600 workers will be told to stay home and “not delivering the goods will, in fact, cause the stop of the three [Fiat Chrysler] production lines” starting today and, as of March 2, “all the other FCA plants in Europe and those of Renault, BMW, and Peugeot will close too.”
MTA says that it will ask Italian authorities if about 10 percent of its workers will be able to return to work so as not to cause too large a disruption to the supply chain. As a global company, MTA says it “has already dealt with the Covid-19 emergency in its Chinese production plant in Shanghai, and therefore knows all the procedures necessary to continue producing in total safety of its workers.”
Things are worse in China, where retail sales of passenger cars were down about 92 percent in the first half of February compared to the same time period last year, and the annual Shanghai auto show has been postponed.
General Motors has a big presence in China through a number of joint ventures with local companies. A GM spokesperson told Car and Driver that it restarted production at some plants in China on February 15, but its plants in Hubei province, the epicenter of the coronavirus, will be kept closed until at least March 10. Even with all of these closures, GM says it expects the coronavirus will have “no impact” on its production plants in the U.S.
Nissan’s local partner in China, DFL, restarted operations at three plants this month (the latest just yesterday) but the Japanese automaker also believes any impact on U.S, production will be minimal and told C/D that it is too early to tell what, if any, impact the virus will have on sales.
Volvo has also restarted one of its production sites in China and is waiting for local government authorities to give the all-clear before restarting its other plants. Volvo’s plants in Europe and the U.S. are running at their normal pace, Volvo said, and although there is a shortage of certain components, “these are not critical so we cannot see any interruptions in our production in the near term.”
Toyota has reduced its output to a single shift at its four vehicle plants in China, while all of Hyundai Motor Company’s production facilities in Korea and in China are in operation. We will bring updates as they are available.