The LMC noted that volatility will persist until 2021 until signs of a global epidemic containment.
The new crown virus has become a global pandemic, and the global auto market outside China has been impacted. According to Reuters, market data analysis agency LMC Automotive has lowered its U.S. auto sales forecast for 2020 to 16.5 million units. This year, global light vehicle sales will be reduced by 4% to 86.4 million units, which is the lowest level since 2013.
Italy has the largest number of confirmed cases outside China. After announcing the closure of most cities and restricting 1/4 of the population flow, the American automaker FCA announced that it will close its factories in Italy from March 11 to March 14 and take the initiative to reduce production. In addition, Italian tire maker Pirelli also announced that it has cut production for several days.
Containment measures have impeded normal production and may have a longer-term impact. Italian brake maker Brembo warned that production in northern Italy could be in trouble if the government takes tougher measures to deal with the spread of the epidemic. An Italian automotive industry association bluntly said last week that car sales in the country could fall by more than 15% due to the outbreak.
The number of infections in Europe is still rising, and European car companies and car supply chains outside Italy are also in trouble. According to Reuters, a Peugeot Citroen spokesperson previously stated that the company has strengthened safety regulations at its 5,000-person factory in Mulhouse, France, after a positive test for new crown pneumonia in an employee. . Seat, a German subsidiary of Volkswagen in Spain, is also considering reducing production capacity and laying off workers due to supply chain problems, which may involve 7,000 employees at the plant.
In addition, several cases of infection have already occurred in Michigan, where the three major auto giants gather-there are more than 1,600 automakers here. However, after confirmed cases were reported at the FCA plant, there were reports that the plant had not been shut down, which caused a lot of uncertainty in subsequent production.
Morgan Stanley said in an investor report on Wednesday that the outbreak of the new coronavirus epidemic will lead to a 9% decline in U.S. auto sales this year, after a decline generally agreed by analysts. The range is 1-2%.
The slowdown in production is second. Morgan Stanley analyst Adam Jonas pointed out in a research report that the outbreak has caused consumers to postpone buying of commodities. The most direct evidence is that in the first week of March, US car sales in the United States have decreased by 10% year-on-year. Analysts are divergingDiffering forecasts for car sales in the US market in 2020. Jeff Schuster, senior vice president of forecasting for LMC, even pointed out that volatility will persist until 2021 until there are signs of global epidemic containment.
But the biggest headache for car companies is that, due to the interruption of production by Chinese suppliers, old European and American car companies such as Jaguar Land Rover and GM have used air transport to remove Parts are shipped back to local factories for production. However, the unexpected spread of the epidemic may also make all the efforts they had done previously unsuccessful.