The COVID-19 coronavirus is impacting the auto sector in multiple direct and indirect ways, supply-side and demand-side

The COVID-19 coronavirus is impacting the auto sector in multiple direct and indirect ways, supply-side and demand-side

A daily update of news and views on the COVID-19 coronavirus crisis and its impact on the automotive sector

Case counter continually updated here 

ACEA lost production tracker here

ACEA lost employment tracker here

9 April

Nissan has requested a US$4.6bn commitment line from major lenders to cushion the impact of the coronavirus pandemic while it seeks to engineer a desperately needed turnaround, people with knowledge of the matter told the Reuters news agency.

Factory shutdowns as a result of the COVID-19 crisis have resulted in lost production amounting to 1,465,415 motor vehicles to date, according to new figures published by the European Automobile Manufacturers' Association (ACEA).

Visteon has withdrawn its financial guidance provided in February, 2020 and has unveiled operational cost reductions in response to the coronavirus crisis.

PSA is supporting the 'All United Against Coronavirus, an alliance of Fondation de France, AP-HP (Assistance Publique-Hôpitaux de Paris) and Institut Pasteur.

Engineering consultancy Ricardo said it was about to go into production manufacturing face shields which will be used by frontline NHS healthcare staff in the UK as well as by key workers in the care home sector. Jaguar Land Rover is also ramping up production of such protective visors in both the UK and Brazil.

The coronavirus crisis could turn out to be a positive for the aftermarket sector in the long-run. The Covid-19 pandemic impact is forecast to lower replacement/scrappage of existing vehicles in use – making the parc last longer – and bringing opportunity for repair and maintenance parts and components, according to research undertaken by GlobalData.

Henkel says it has decided the forecast for fiscal 2020 published in the Annual Report, 2019 will no longer be upheld as manufacturing worldwide deals with the coronavirus pandemic.

BYD has outlined its Europe operations situation in the light of the coronavirus pandemic.

8 April

Mercedes-Benz sold 477,378 cars in the first quarter of 2020, down 14.9% year on year.

Volkswagen said "a few" components units, which have continued operation "to some extent", will extend their operations to safeguard the supply of parts to plants in China from the Tuesday after Easter.

VW Group brand SEAT has now started production of emergency ventilators at its Martorell facilities to contribute to the crisis caused by COVID-19. The ventilators are being made on the SEAT Leon assembly line.

Tesla reportedly has told workers to brace for pay cuts and furloughs as the Covid-19 pandemic disrupts its operations and cripples demand.

The US Department of Health and Human Services has announced the first contract for ventilator production rated under the Defense Production Act, to General Motors.

Russia new car and LCV sales rose by 4% in March and 1.8% in Q1, but the Association of European Businesses (AEB) is calling on Moscow to provide State support for the auto sector in the midst of the coronavirus pandemic.

Indonesian vehicle production is expected to fall by 50% in 2020 as economic activity in the country and in key export markets declines sharply due to the COVID19 coronavirus pandemic.

Staffordshire's Faurecia now will furlough workers following pressure from union Unite. The supplier has now confirmed that its workforce would be registered under the government's job retention scheme following pressure from the union which roped parent company PSA and customer Jaguar Land Rover into the fight.

Automotive logistics specialist GEFCO said it had transported 750 tonnes of key automotive spare parts to France, including turbo compressors, pistons, control panels, doors and mouldings, in eight chartered flights to prevent production stoppages over the last two months.

Benteler is donating face mask holders to the Galician health service in north west Spain.

7 April

Australian new vehicle sales were down 17.9% in March, the Federal Chamber of Automotive Industries (FCAI) said, attributing the drop to the effects of the COVID-19 pandemic on the general economy.

New Zealand's Motor Industry Association said March 2020 registrations were down 37.3% year on year with 8,317 new vehicles registered compared to March 2019's 13,271 sales.

Nissan Motor reportedly is to lay off about 10,000 workers at its idle American plants while Honda Motor is placing more than half its US staff on temporary leave, as Japanese automakers step up their response to the coronavirus pandemic.

Japan's new vehicle market continued to shrink in March 2020, by 9.2% to 581,438 units from 640,813 units a year earlier, according to registration data released by the Japan Automobile Manufacturers Association. The market had been in decline since the government hiked the general sales tax rate from 8% to 10% at the beginning of October last year. The COVID19 coronavirus is also beginning to have a significant impact on consumer and business activity in Japan with the government set to implement a state of emergency in several major cities including Tokyo to help slow the spread of the virus.

French suppliers association, FIEV (Fédération des Industries des Equipements pour Véhicules), says it will not collect subscriptions for this year given the scale of the coronavirus pandemic.

Bharat Forge and other Kalyani Group companies, have pledged assistance via a direct contribution of INR250m (US$3.3m) to the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PMCARES Fund) to fight against the Covid-19 pandemic

Michelin is to hold its Annual Shareholders Meeting behind closed doors on 23 June and reduce its 2019 dividend in response to the coronavirus pandemic.

6 April

Over 100 agency workers, employed on the DHL logistics contract at Tata Motors' Jaguar Land Rover plant at Halewood in Merseyside have had their jobs saved, the Unite union claimed. The workers, employed by the Staffline agency, had been informed they were to be 'let go' after the JLR site announced it was temporarily ceasing production during the coronavirus crisis. However following the intervention of Unite and the support of local MP Maria Eagle, Staffline has reversed its decision and the workers will instead be furloughed on 80% of their pay.

UK sales of new light commercial vehicles (LCVs) last month fell more than the 44.5% plunge seen for new cars - 54.3% year on year in March amid nationwide lockdown measures in response to the coronavirus crisis.

South Korean SUV manufacturer Ssangyong Motor Company on Monday said it would have to sell off non-core assets to help it remain in business after its Indian parent company Mahindra & Mahindra Ltd cancelled its turn-around plan for the company due to the escalating global COVID19 coronavirus pandemic.

The UK car market was down 44.5% in March as the COVID-19 crisis caused showrooms to close in lockdowned Britain. The SMMT noted it was a steeper fall than during last financial crisis and the worst March since the late 1990s (before the registration number plate year identifier changes that boosted the months of March and September).

Toyota Motor is halting production at five plants in Japan in response to a sharp fall in overseas demand due to the global COVID19 coronavirus pandemic. The shutdown affects seven production lines, with operations to be suspended for up to two weeks as the company looks to reduce output by 36,000 units. Suppliers are also expected to follow Toyota's lead in cutting output. Toyota has 18 vehicle assembly plants in Japan, including facilities operated by affiliated manufacturers. The automaker confirmed production at its Miyata plant in Fukuoka Prefecture had been suspended for the longest period, until 15 April.

Subaru Corporation said it would change the starting date of its planned production halt at its Gunma manufacturing plant due to newly occurred interruptions in its supply chain. The starting date of the Gunma Manufacturing Plant shutdown would be moved up by two days to 9 April. Shutdown periods are now between 9 April and 1 May, 2020 (9-11 April, 13-18 April, 20-24 April, 27 April-1 May). A total of 19 plant working days will be lost. The plant will reopen on 11 May, 2020 (2-10 May is an originally scheduled holiday).

PSA has signed an additional EUR3bn (US$3.2bn) syndicated loan in addition to the existing EUR3bn undrawn confirmed line of credit for a total amount of EUR6bn in the light of the coronavirus situation.

Cooper Tire says its manufacturing plants in the US and Mexico will remain closed for at least another two weeks to protect the health and safety of employees during the coronavirus outbreak.

Tenneco is withdrawing its first-quarter and full-year financial guidance issued on 20 February, 2020 and will provide additional updates during its first-quarter 2020 earnings call.

Lear is to postpone its Investor Day, previously scheduled for 9 June in Southfield, Michigan, due to ongoing health and safety consideration, as well as travel restrictions surrounding the coronavirus pandemic.

Schaeffler and the Schaeffler family are jointly donating EUR1m (US$1.1m) to the Red Cross to help in the fight against Covid-19.

3 April

Ford has published its 2020 proxy statement and and said it would hold a virtual annual meeting next month.

Ford said the temporary suspension of vehicle and engine production at most of its European manufacturing sites is now expected to run at least until 4 May. The announcement followed earlier announcements production would be suspended temporarily from 19 March for a number of weeks at the main continental European manufacturing sites (Saarlouis and Cologne, Germany; Valencia, Spain; and Craiova, Romania), with production also halted at Bridgend and Dagenham engine plants in the UK from 23 March. Valencia, Spain, will remain in temporary suspension until at least 27 April.

Honda Motor said it would extend a shutdown of all US and Canadian car plant production through 10 April and at its plant in Celaya, central Mexico, until 13 April, because of the ongoing coronavirus outbreak.

Production at Nissan's British factory, the country's biggest car plant, is suspended throughout April, continuing a shutdown in place since mid March as the coronavirus outbreak continues across Europe

Ford said it would make 50,000 face shields at factories in Brazil and Argentina to donate in the fight against the coronavirus pandemic.

Nissan Vietnam will shut down its assembly plant for two weeks amid a nationwide social distancing campaign to curb the spread of the coronavirus, the company said.

It looks like digital vehicle sales will get a COVID-19 boost. We are already getting an indication of change ahead by seeing how dealers are approaching sales in China, which is a few months ahead of the western world in terms of managing the outbreak. Geely, one of the country's largest automakers, has already launched a no-contact car buying service – the vehicle is delivered to the customer, disinfected, and then the keys are sent separately via a drone. Expect to see dealers offering virtual tours of vehicles or negotiations over video calling services.

COVID-19 will force auto retailers to embrace digital transformation

The world's biggest motor show in even numbered years is back on, the biennial event in Beijing having been delayed from its original dates in April. After many weeks of silence and having said that the event was being "postponed', the organisers of AutoChina 2020 have now issued a statement, announcing that the new dates will be from 26 September to 5 October. Official dates for the press preview are yet to be stated.

Reports from India suggest the burgeoning shared mobility services sector is emerging as a big loser in the current COVID-19 crisis and is also denting its prospects further out. GlobalData analyst Animesh Kumar says the pandemic is leaving a deep mark on the mobility sector in India. Furthermore, he says the impact is likely to be witnessed beyond the current crisis. "Uncertainty over recovery poses an existential threat to many shared mobility service providers," he maintains.

Taiwan's new vehicle market continued to shrug off the growing global threat of the COVID19 coronavirus in March 2020 with sales jumping by over 15% to 37,279 units from a depressed 32,391 units a year earlier, according to local reports citing registration data compiled by Taiwan's Directorate of Highways.

Our resident analyst has likened the hit to US light vehicle sales from COVID-19 to the hurricanes that regularly assault the Gulf Coast. Based on incomplete reports, first quarter sales were down about 12.6% to about 3.49m cars and light trucks. Jaguar Land Rover and Mercedes will be reporting their results later and there aren't any good estimates yet for Tesla. Ironically, there was another hurricane analogue: the only segment that came through March in the black was full size pickups, up 3.1%. Mid size trucks, such as the Ford Ranger, almost broke even, falling short by just 0.9%. Combining the two produced a whole segment gain of 2.3%. Pickups claimed more than 20% of first quarter sales.

Michelin is advancing the closure of its Dundee factory in Scotland from June this year, with the site not restarting production when coronavirus restrictions are lifted.

Recticel has temporarily stopped its European automotive activities, although it notes business in China is progressively returning to pre-coronavirus levels.

2 April

Autoliv said it was withdrawing its full year 2020 guidance until the effects of the COVID-19 pandemic could be better assessed. It also said it was cancelling the dividend scheduled for 4 June, 2020 and suspending future dividends although the board would review such suspension on a quarterly basis. It was also drawing down US$600m of cash from an existing credit line. Executives were voluntarily reducing their base salaries by 20% for Q2 2020 and non-employee board members reducing annual base retainer by 20% for Q2 2020.

Staffordshire supplier Faurecia Interiors is under increasing pressure to commit to registering staff under the UK government's job retention scheme, which guarantees 80% of wages, during the coronavirus lockdown, union Unite said. Following repeated attempts to engage with the interiors specilaist, which has refused to confirm that laid off workers would be registered under the scheme, Unite has now contacted Faurecia shareholder PSA and its customer JLR. The union has asked the car maker to pressure Faurecia "into following the example of many other companies in the automotive sector by issuing a guarantee".

Geely's Volvo Cars sold 131,889 cars in the first quarter of 2020, down 18.2% year on year. The company said global sales performance was affected by the continued impact of the coronavirus pandemic. March sales plunged 31.2% to 46,395 cars, led by weakening demand in Europe and the US. China, however, was showing signs of recovery, as showroom traffic continued to improve.

Nissan Motor said its manufacturing facilities in the US would remain closed "through late April" as a measure to help protect employees and reduce the spread of COVID-19 coronavirus. "Some business essential work that must be done on site will continue with enhanced safety measures," the automaker said.

Mitsubishi Motors Corporation said it would temporarily suspend production at three plants in Japan "considering global market decline due to the global expansion of COVID-19 coronavirus". It had said earlier it would temporarily suspend production of kei cars in Japan.

Light vehicle sales in the US fell nearly 39% in March compared with last year, according to industry sales data emerging today. Data from Ward's shows that 992,392 light vehicles were sold last month, also a sharp drop on February's 1.4 million, according to Ward's. The sharp drop to US vehicle sales last month was widely expected as social distancing and lockdown measures took hold in the US in response to the COVID-19 public health emergency. 

GlobalData forecasts in its base case scenario that the US light vehicle market in 2020 will be around 14.7 million units - a drop of almost 14% on 2019's total. The next few months are expected to be particularly weak, with a strong pick-up to vehicle sales in the third quarter forecast, as economic activity returns and population movement controls are relaxed.

US light vehicle sales in March down 39%

PSA is the latest to postpone its annual general meeting due to coronavirus. "In the context of the Covid-19 epidemic around the world, the managing board of Peugeot SA, in agreement with the supervisory board, has decided to postpone the annual shareholders' general meeting, initially scheduled on 14 May to 25 June, 2020," PSA said in a statement.

In a fourth guest article written exclusively for just-auto, Dato Madani Sahari, the CEO of Malaysia Automotive, Robotics and IoT Institute (MARii), describes the potential impact of COVID-19 on Malaysia and its burgeoning automotive sector. There's a positive message from southeast Asia: "Within the automotive sector – the general consensus is that while there are concerns, there is no need to press the panic button just yet." Good to hear. 

COVID-19 and the Malaysian socio-economic balance

Continental is withdrawing its outlook for the current fiscal year due to the uncertainty regarding the duration of restrictions caused by the coronavirus pandemic and related possible consequences for production, the supply chain and demand.

RHA (Road Haulage Association) chief executive, Richard Burnett has written to British MP, Michael Gove, handling part of Brexit negotiations, to call for an extension to the UK's transition period for leaving the EU as political bandwith is completely consumed by the coronavirus crisis.

Renault is making nearly 1,300 vehicles available to French healthcare personnel as they battle the coronavirus pandemic.

PSA has outlined the range of measures it is taking to help in the fight against the coronavirus pandemic, including respirator component production.

1 April

Nexteer Automotive said it was using its 3D printers in Saginaw, Michigan and Tychy, Poland to make plastic masks and face shield headbands, working with local government and medical organisations to donate the supplies to nearby medical facilities.

Sales by India's biggest carmaker Maruti Suzuki India, which sells one in every two cars in the country, fell 16% in the last fiscal year, hit by a slowing economy and lean demand as well as the coronavirus outbreak.

Volkswagen production in Germany has been suspended for a further five working days until 19 April. The automaker had said earlier it planned to end short-time working with the night shift of 9-10 April.

Daimler says its 3D printers in use at Mercedes-Benz - used to produce automobile components in normal times - have been turned over for the production of medical equipment. Daimler says it is making its machines, know-how, and trained specialists available for the production of medical equipment to fight the COVID-19 public health crisis.

Daimler 3D printers produce medical equipment

Volkswagen says it is optimistic the Chinese vehicle market would return to close to last year's level by early summer, following signs of a strong sales rebound in recent weeks. The German group is the largest automaker in China through its joint ventures with local state-owned enterprises (SOEs) FAW Group and SAIC Motor. Volkswagen Group China CEO Stephan Woellenstein told local reporters "there are more and more signs that business in China is recovering. By the middle of the year, we could be back to last year's levels. Hope is returning to the Chinese market".

Geely Holding Group this week said it was targeting a 3.7% sales increase to 1.41m units in 2020 despite the global coronavirus pandemic, following a 9% decline to 1.36m units in 2019 - according to local reports. Speaking at the annual results meeting of Hong Kong-listed Zheijang Geely Automobile Holdings, group president An Conghui also confirmed the upmarket Lynk & Co brand would be launched in Europe in the fourth quarter of 2020 as part of a stepped strategy to expand global sales.

GAC Group this week signed a partnership agreement with the Guangzhou Institute of Respiratory Health to develop technology and products for the prevention and control of respiratory diseases, according to local reports. The two partners have agreed to establish a jointly owned engineering technology centre and a manufacturing facility for products that can help prevent and control respiratory infections.

Ford is delaying the restart of vehicle production at its North America plants and has put no date on a future restart. The company had been aiming to restart production April 6 at Hermosillo Assembly Plant and April 14 at several key US plants – and now has further postponed re-start dates, which will be announced later. The decision was widely expected as the auto industry in North America hunkers down in the crisis and looks to help out with manufacturing healthcare equipment.

Renault has put some employees at its Île-de-France [large area around Paris] sites on temporary contracts.

TomTom has withdrawn its 2020 outlook as the economic impact resulting from the Covid-19 pandemic on its financial results can currently not be reliably assessed.

31 March

Porsche Automobil Holding SE said its AGM would be postponed "in the light of the existing bans on meetings due to the corona pandemic".
The event, typically attended by approximately 3,500 shareholders, had originally been scheduled for 19 May 2020.

The jobs of at least 1,110,107 Europeans working in automobile manufacturing are affected by factory shutdowns as a result of the COVID-19 crisis, according to data compiled by the European Automobile Manufacturers' Association (ACEA). This refers only to those directly employed by car, truck, van and bus manufacturers – the impact on the wider automotive supply chain is even more critical.

Delphi Technologies said it had been taking significant steps to conserve cash given the immediate impact on its business from the coronavirus  pandemic. This included working to access government support in countries where it operates, effecting temporary layoffs, moving employees to part time schedules and pay reductions throughout the organisation, disciplined inventory management and active past dues collection. Delphi has also drawn down on its full $500m revolving credit facility to best position the company to weather the current market conditions.

PSA and Valeo, among other companies led by Air Liquide, have been asked by the French government to study the possibility of increasing respirator production to provide 10,000 of the machines in 50 days in a bid to aid the coronavirus battle.

Ford, in collaboration with GE Healthcare, said it would begin producing in Michigan a third party ventilator with the goal of producing 50,000 of the vitally needed units within 100 days and up to 30,000 a month thereafter as needed. Ford would provide its manufacturing capabilities to quickly scale production and GE Healthcare would provide its clinical expertise and license the current ventilator design from Airon Corporation, a small, privately held company specialising in high-tech pneumatic life support products.

Faurecia has shut down a large number of its production sites in Europe and will do the same in North and South America, following similar temporary moves by its customers.

Seating and e-systems supplier Lear Corporation said it had added capacity at its AccuMED production facility, which specialises in the manufacturing of medical products, to produce protective masks to combat the COVID-19 pandemic. It had begun in February, with masks for China. It also is currently designing and developing full face shield visors for production.

VW-Group brand SEAT has revealed that it is making ventilator prototypes at its Martorell plant in Spain and a ventilator is now currently undergoing prolonged testing as part of the approval process. The key, SEAT says, lies in the windscreen wiper. The project is taking shape with gears printed at SEAT, gearbox shafts and the adapted motor of a windscreen wiper.

Automakers are reaching for credit lines as COVID-19 impacts demand and the outlook for revenues and profitability. In addition, automakers are bearing the financial burden of supporting furloughed workforces and, in some cases, repurposing factories and supply chains to provide much needed ventilators and medical equipment. These extreme circumstances have pushed some automakers to access sizeable credit facilities to shore up their financial positions. For example, Japanese giant Toyota has announced it is seeking a JPY1 trillion ($9 billion) line of credit from Sumitomo Mitsui Banking Corp. and MUFG Bank Ltd. Yep, that's relatively financially healthy Toyota. Others will follow.

Automakers reach for credit lines as crisis bites  

Renault says all its plants worldwide with the exception of those in China and South Korea are now shut as the manufacturer takes stock of the spread of the coronavirus.

Paris Motor Show organisers say the 2020 event will not take place in its current form when it opens later this year in the light of the huge uncertainty created by the coronavirus pandemic.

30 March

Nissan said it would temporarily "adjust" (read: cut) production at three of its factories in Japan, "due to decreased demand in the automobile market". "This measure adds to efforts to contain the spread of the COVID-19 coronavirus and prioritises the well-being of employees, their families, suppliers and society in general," the automaker said in a statement.

President Trump invoked the US Defense Production Act to force General Motors to produce ventilators, a media report said. "Today, I signed a presidential memorandum directing the [HHS Secretary] to use any and all authority available under the Defense Production Act to require General Motors to accept, perform, and prioritise federal contracts for ventilators," Trump said in a White House statement.

GM Korea said it would delay payment of 20% of the salaries of management level employees from April, as the company looked to protect its financial health as global demand for its products continued to decline due to the COVID19 coronavirus. The South Korea subsidiary of General Motors told its local staff it would pay the outstanding salaries as a lump sum later in the year or in the first quarter of 2021 once the health crisis had abated and business conditions improved.

The Detroit Motor Show is cancelled.  The North American International Auto Show - NAIAS - will now not take place this year, the organiser has announced. Having been moved from its traditional January slot on the global shows calendar, the show had been due to take place in June. Instead, the next NAIAS is now planned for June 2021.

Toyota Motor has asked two leading Japanese banks to set up a line of credit totaling JPY1 trillion (US$9.2bn), according to local reports citing company sources. The move signals the carmaker's concerns over rising funding costs as global vehicle demand continues to plunge due to the COVID19 coronavirus.

Carers in the are US to get free Lyft rides during the COVID-19 crisis. The National Council on Aging (NCOA) in the US says it is partnering with Lyft to meet the critical transportation needs of caregivers who are supporting homebound older adults during the COVID-19 outbreak. NCOA senior centres will receive a grant donation to support the distribution of $15 and $25 Lyft ride credits to share with caregivers who need access to transportation to deliver essential food and supplies to senior citizens.

Marelli has extended the temporary shutdown of its manufacturing activities in the majority of European plants to 3 April.

27 March

The coronavirus (COVID-19) is by far the most significant theme to affect the technology industry in 2020. It will put incredible strain on the world's economy, which will be effectively halted for three months or more. Many components companies will not survive this initial phase. Before COVID-19 hit, component makers were already suffering from waning global business confidence and flagging capital expenditure on automating and upgrading plant. Industrial robot sales have stalled, even in China which has a high priority in increasing its robot density, said GlobalData, the data and analytics company, and parent of just-auto.

Mitsubishi Motors Corporation said it would temporarily suspend production of kei cars in Japan. It said it was "considering the impact on the parts supply chain due to the global expansion of COVID-19 coronavirus".

Fiat-Chrysler (FCA) is in the process of converting its first plant to produce face masks for donation to first responders and health care workers. The first machinery has been delivered and installed with supply and donation coming on stream in the coming weeks. FCA said it was expanding its programme of measures to support coronavirus relief efforts, focused on two principal areas: charities providing food services to children and support for a range of technical, logistical and manufacturing programs, such as face mask production.

Fiat-Chrysler (FCA) said plants across the US and Canada, as well as headquarters operations and construction projects, would remain closed until 14 April, "dependent upon the various states' 'stay-in-place' orders and the readiness of each facility to return to production". Mopar parts distribution centres, been deemed essential to keeping first responders and commercial vehicles on the road, would continue to operate with paid volunteers. The status of production for FCA's Mexico operations would be announced separately.

Having earlier announced a production suspension from 21 March to 10pm Sunday, 29 March, Volkswagen said its US plant in Chattanooga will now remain closed next week, extending the shutdown period to 10pm, Sunday 5 April.

Volkswagen is to extend the production suspension at its German plants for a further four days until April 9. The suspension includes its assembly and component making plants. Volkswagen said it is responding to the 'fall in demand on the automobile market and the challenges faced by the supply chain' but hopes to start making vehicles again 'soon'.

British logistics association, FTA (Freight Transport Association) is asking for an extension to the Brexit transition period as Europe remains resolutely fixed on fighting the coronavirus pandemic.

Faurecia has donated 100,000 surgical masks to the Civil Hospitals of Colmar in Eastern France, an area particularly affected by the coronavirus, while Valeo has also made a similar gesture.

AAM says, as a result of the unexpected disruption in light vehicle production and economic uncertainty due to the impact of the Covid-19 pandemic, it is withdrawing its 2020 financial outlook.

Lear is instituting additional employee safety measures and enhancing the company's financial flexibility in light of the substantial impact Covid-19 is having on the automotive industry and the global economy more broadly.

Paris Motor Show organisers say the 2020 event will not take place in its current form when it opens later this year in the light of the huge uncertainty created by the coronavirus pandemic.

26 March

Toyota said it would further extend the length of its production suspension at all of its automobile and components plants in North America, including Canada, Mexico and the US, due to the ongoing COVID-19 pandemic and significant decline in vehicle demand. The manufacturing facilities would remain closed until 18 April, resuming production on 20 April.

The UK's Unite union claims Faurecia Interiors is "terrifying" laid off workers by refusing to inform them whether they will be registered under the government's scheme to pay workers 80% of their wages. The union claimed the PSA owned supplier, which employs around 400 people at two sites at Fradley in the English West Midlands as well as at other locations across the UK, has sent a "heartless" letter to staff laying them off until 20 April which makes no mention of the government's furlough scheme. "Faurecia, however, have completely disregarded their workforce's concerns and are refusing to answer Unite's repeated enquires on the issue," the union said.

Brose said it was "largely" stopping work at most of its European locations beginning late March. The company said it was responding to a dramatic decline in orders as a result of interruptions in production at many of its customers' sites. The measures are designed to contain the economic damages caused by the corona crisis. Most European plants are impacted by the policies. The management board and works councils agreed work at all German locations would largely come to a halt until at least 19 April. Many customers are not planning on recommencing production until mid April. Business operations in China have recommenced, however.

Ford said it was aiming to restart production at some plants in North America as early as 6 April, bringing key plants back online while it introduces additional safety measures to protect returning workers. The automaker was planning to resume production at Hermosillo Assembly Plant (Mexico) on 6 April on one shift. On 14 April, it plans to start building vehicles at Dearborn Truck Plant, Kentucky Truck Plant, Kansas City Assembly Plant's Transit line and Ohio Assembly Plant. To support these assembly plants, Ford also is aiming to resume production on 14 April at various component plants.

One of the last to hold out, Kia Motors has now said it would suspend production at its US assembly plant until mid April to help prevent the spread of the COVID19 coronavirus. Production at the plant, in Georgia, had already been halted temporarily at the end of last week due to a lack of engines from the Hyundai plant in Alabama which had already ceased production as a result of the disease. Kia said activity at its plant, which has the capacity to produce 340,000 vehicles per year, will be suspended on 30 March until at least 13 April, during which time it will carry out quarantine and disinfection activities.

Hankook Tire & Technology announced the closure of its Tennessee plant between 30 March and 7 April to keep inventory manageable in response to vehicle plant closures across North America and Europe. Earlier this week the company said it was suspending production at its tyre plant in Hungary in the same period.

Analysts at Edmunds say that March will see a much reduced US vehicle market in the wake of the COVID-19 coronavirus crisis, with overall sales down by a forecast 35.5% and the SAAR down at a depleted 11.9m units. Some analysts say that sales over the past week are more than 80% down in areas of the US in stay-at-home ('lockdown') mode due to the deepening public health crisis.

European automotive supplier association, CLEPA says a poll supported by McKinsey shows 60% of respondents expect to lose 20% or more of revenue.

Martinrea is withdrawing its previously-disclosed financial guidance and medium-term outlook.

25 March

General Motors plans to draw down about US$16bn from its revolving credit facilities, a proactive measure to increase its cash position and preserve financial flexibility due to the current uncertainty in global markets resulting from the COVID-19 pandemic. The funds will supplement the company's strong cash position of approximately $15bn to $16bn expected at the end of March. "We are aggressively pursuing austerity measures to preserve cash and are taking necessary steps in this changing and uncertain environment to manage our liquidity, ensure the ongoing viability of our operations and protect our customers and stakeholders," said Mary Barra, GM chairman and CEO.

Renault has shut down production activities at industrial sites in Latin America until further notice, depending on the evolution of the coronavirus health situation.

Grupo Antolin and its employees have launched several initiatives to manufacture medical equipment and address the shortage of protective equipment against coronavirus in Spanish hospitals.

New Zealand's Motor Industry Association and Motor Trade Association said in a joint statement members would provide parts for and service and repair only vehicles used in the supply of essential services as the country enters a mandatory Level 4 lockdown. MIA chief executive David Crawford said distributors of new vehicles and their franchised dealerships had quickly responded to ensure all non-essential services were shut down.

Mazda said it would "adjust" production globally "in consideration of difficulties in parts procurement, the plummeting sales in overseas markets, and the uncertainty of future markets". It will suspend production for 13 days and operate day shifts only for eight days at Hiroshima Plant and Hofu Plant from 28 March to 30 April. Mazda de Mexico Vehicle Operation will shut down for about 10 days starting from today (25 March) while AutoAlliance (Thailand) will suspend production for about 10 days starting from 30 March. "We will continue sales operations in certain countries including Japan and China," the automaker said. "For other regions, we will take appropriate responses respective to each country's policies aimed at preventing the spread of the virus and give our utmost effort to minimise the impact on sales and service operations for customers. "In addition, we will work on minimising the impact on local business partners who have always showed their support."

Ford said it had joined with companies including 3M and GE Healthcare to lend its manufacturing and engineering expertise to quickly expand production of urgently needed medical equipment and supplies for healthcare workers, first responders and patients fighting coronavirus. Ford said it also plans to assemble at least 100,000 face shields per week and leverage its in-house 3D printing capability to produce components for use in personal protective equipment. Ford also is evaluating a separate effort not involving GE Healthcare with the UK government to produce additional ventilators. The automaker is also reacquiring 165,000 N95 respirators from China that were originally sent over earlier this year to help combat the virus.

Ford said, in light of various governments' orders to stay and work from home, it was now not planning to restart plants in the US, Canada and Mexico on Monday, 30 March as originally hoped. Revised opening dates would be advised in due course.

Aston Martin has temporarily suspended all manufacturing at its UK plants in line with the latest UK government instructions on the fight against COVID-19. "The business has taken this difficult but appropriate action in its determination to fully support the UK government's measures on slowing the spread of COVID-19 and, crucially, to protect the health and safety of its workforce, its suppliers, and their families," the luxury sportscar maker said in a statement.

Having scaled back its annual general meeting after Sweden's public health agency upgraded the risk of spread of the new coronavirus in the country and banned public gatherings of more than 500 people, heavy truck and construction equipment maker Volvo AB has now decided to postpone the AGM "given the uncertain and accelerating developments in the wake of COVID-19".

Renault has postponed its AGM due to the coronavirus outbreak. The automaker said in a statement: "In the current uncertain context due to the coronavirus pandemic worldwide, Renault's board of directors has decided to postpone the annual general meeting of shareholders scheduled for 24 April, 2020 to a future date in May or June. "The [board] is keen to encourage significant participation by its individual shareholders in the general meeting. With this in mind, the general meeting of holders of participating shares is also postponed."

Data to 29 February showed the impact of COVID-19 had yet to hit the European automotive market. A tally of 1,063,264 units was registered last month, compared to 1,143,852 in February 2019, a fall of 7% year on year and the lowest number of February registrations since 2015 (955,113).
January volume fell 7.6% and the first two months of this year saw a cumulative fall of 7.3% to 2,194,706 units. Electrified vehicle registrations jumped from 75,400 units in February 2019 to 135,500 last month. The increase of over 80% came at the expense of diesel and petrol cars with significantly fewer registrations.

Chinese electric vehicle startup Nio said it expected to make a positive gross profit margin in the second quarter of 2020 despite the market turmoil caused by the COVID19 coronavirus. Since launching production of its new EC6 battery powered sedan in February, the company had become increasingly bullish about its full year prospects. Chairman and founder William Li last week said "based on the current trend, we would hope the daily new order intake rate in April to return to the level of last December".

Zhejiang Geely Holding Group said all of the company's manufacturing facilities in China are now up and running. "All Geely plants began to come back online on 25 February, the last plant came online on 1 March," Ash Sutcliffe, Geely's head of external PR told just-auto. "Our Luqiao factory (that also produces Lynk & Co 01, Volvo XC40 etc) yesterday began production of the Polestar 2." 

Schaeffler has suspended guidance for the 2020 financial year for the Group and its divisions published on 10 March, 2020.

BorgWarner hastemporarily suspended operations at certain of the company's manufacturing and assembly facilities.

24 March

Amidst all the global plant closure news, this just in: amid government claims that the number of new deaths in Wuhan from COVID-19 has fallen to zero, Dongfeng Nissan has moved to restart production of China's best selling vehicle. Not only the Sylphy but multiple other Nissan cars and SUVs are now rolling off lines at various DFL plants, while there are reports that fully 90% of dealerships are open again. It will of course take some time for consumers to regain their enthusiasm for spending on high priced products such as cars, especially in the absence of any major incentives.

And production of the Polestar 2 has begun officially in Luqiao. For initial delivery into Europe, followed by China and North America, the new electric performance fastback is the first electric vehicle to be produced by the factory. "The world is facing enormous upheaval in the face of the coronavirus pandemic, said Polestar CEO, Thomas Ingenlath. "We start production now under these challenging circumstances, with a strong focus on the health and safety of our people. This is a great achievement and the result of huge efforts from the staff in the factory and the team securing the supply chain."

Several Japanese automakers confirmed they had suspended operations at their Indian factories due to the spread of the COVID19 coronavirus in the country. Toyota, Honda, Suzuki and Nissan, some of India's leading vehicle manufacturers, said they ceased production in the country after the government instructed public transport companies to suspend their operations to help slow the spread of the disease.

Bridgestone EMIA says its plants across its European manufacturing network will be either temporarily closing or reducing production, in response to the Covid-19 pandemic.

Plastic Omnium says staff are working from home where possible, while those who enter the supplier's plants have their temperature checked and production is organised to avoid contact between employees when changing shifts.

Around 400 automotive component suppliers in Romania have stopped output, leaving 230,000 workers unemployed, the Romanian Association of Automobile Manufacturers (ACAROM) said. The two major car producers in Romania, Dacia (18,000 employees) and Ford (6,300) had already announced they would suspend production at least until 5 April.

Fiat Chrysler Automobiles (FCA) says it manufacturing and donating more than one million protective face masks for emergency workers per month. Production capacity is being installed this week and the company will start manufacturing face masks in the coming weeks with initial distribution across the United States, Canada and Mexico. 

Bosch is to 'drastically cut back' operations at its German locations from 25 March, although at some sites, this started successively from 23 March. The move was agreed by the company and Central Works Council and will affect 35 sites of the Mobility Solutions business sector in Germany, as well as locations performing corporate functions.

Marelli has temporarily suspended production activities in the majority of its European plants except for some local cases where operations will continue on a reduced scale.

Renault says it is not envisaging nationalisation as reports in France speculate some large companies in France could come under the tutelage of State control in the midst of the coronavirus pandemic. Renault has closed all its 12 factories in France until further notice, while its plants in Morocco, Portugal, Romania, Spain and Slovenia have also been shut as the outbreak increasingly centres on Europe.

Apollo Vredestein is scaling back production in its European plants in Hungary and the Netherlands. Production for passenger car tyres in the Netherlands will cease from 27th March, 2020, initially for a two-week period.

23 March

"Due to the market situation and decline in demand overseas", Toyota Motor Corporation (TMC) has decided to halt production on seven production lines in five Japanese plants starting from 3 April. The suspension period varies by plant and production line.

SMMT chief executive Mike Hawes has said: "The chancellor's [UK finance minister] unprecedented package of emergency funding and tax support will come as a huge relief to automotive companies of all shapes and sizes as they battle to safeguard their businesses and support thousands of workers and their families who otherwise face hardship. 99% of UK automotive output is now halted meaning thousands of businesses are counting their future, not in months or weeks, but in days. We need these measures implemented swiftly and will work closely with government and our members to keep this critical and fundamentally competitive sector alive.

Some good news about China. BMW is considering increasing its planned investments there, according to local reports citing a company executive, despite the sharp decline in the country's vehicle market due to the COVID19 coronavirus. The CEO of BMW group region China, Jochen Goller, in a conference call last week said "all the investments we are already committed to in China will go ahead and we are actually discussing adding to these investments in the future".

Bridgestone EMIA announced plants across Europe would be either closing temporarily or reducing production. The Bethune plant in France and the Bari plant in Italy will be closed until 6 April. The Bilbao, Puente San Miguel and Burgos plants in Spain, Lanklaar in Belgium, Stargard and Poznan plants in Poland, and Tatabanya plant in Hungary will all be running at reduced capacity. Bridgestone Americas earlier announced temporary furlough of factories in North America and Latin America.

Sweeping announcements by Europe's automakers mean that over 1m vehicles will be lost from production in the period up to the week beginning 27th April, according to GlobalData (parent company of just-auto) estimates.

ALG, a subsidiary of TrueCar, has made an updated 2020 US new vehicle sales forecast to account for the quickly evolving coronavirus (COVID-19) pandemic and the latest economic outlook. Variation is over 4m units a year,

Hyundai Motor said it had suspended production at its vehicle assembly plant in Chennai, India, until at least the end of March as the COVID19 coronavirus continued to spread rapidly across the globe. The Indian government had just ordered manufacturers to lock down their plants across most of the country in the regions where the virus had taken hold. The automaker said its 650,000 unit/year plant had been shuttered in line with local government guidelines. Kia Motors, too, was soon expected to announce the temporary closure of its 300,000 unit plant in Anandapur.

Ford has temporarily suspended production in India, South Africa, Thailand and Vietnam in response to the coronavirus. A vehicle and engine temporary production suspension began at the automaker's International Markets Group (IMG) manufacturing sites last Saturday (21 March). the automaker said the production suspensions would vary market by market and were expected to last a number of weeks depending on the pandemic situation, national restrictions, supplier constraints and dealer stock requirements.

Ford has temporarily suspended production at its manufacturing sites in Brazil – Camacari (BA), Taubate (SP) and Troller's plant in Horizonte (Ceara) – and at the Pacheco plant in Argentina, in response to the growing impact of the coronavirus in South America. This is effective from today (23 March) in Brazil and 25 March in Argentina. In Brazil, the plants are scheduled to restart on 13 April and Argentina operations from 6 April.

General Motors said it was collaborating with Ventec Life Systems, in cooperation with StopTheSpread.org, the nation's coordinated private sector response to the COVID-19, to increase production of Ventec's respiratory care products to support the growing fight against the pandemic. Ventec will use GM's logistics, purchasing and manufacturing expertise to build more of the critically important ventilators. "Ford, General Motors and Tesla are being given the go ahead to make ventilators and other metal products, FAST! Go for it auto execs, lets see how good you are?" President Trump tweeted last night (22 March) , after invoking the US Defense Production Act last week. While it could be difficult to retool an auto assembly line, the companies have 3D printers for components, 'clean rooms' in some plants that could meet FDA standards and Tyvek suits used in paint shops that could be re-purposed.

Volkswagen Group CEO Herbert Diess has warned that VW Group temporary plant closures will likely last longer than the periods so far announced. In a LinkedIn post, Diess noted that most of VW Group's factories in Europe have said they will close for close for two or three weeks. But he warned that it is "likely that the measures will take longer. The spread of the virus is unlikely to have stopped in several weeks. So we have to be prepared to live with the threat for a long time - until effective medication or vaccination becomes available." On a positive note, Diess also said that over 100,000 Volkswagen employees in China are starting up their business activities again. 

Tata-owned Jaguar Land Rover (JLR) has confirmed that it will temporarily suspend production at its UK manufacturing facilities. The company's intention is to resume in the week of 20 April, subject to review. Currently, Jaguar Land Rover's manufacturing plants in Brazil and India continue operating. Also, the company's joint venture plant in China reopened in the week of 24 February, as "life begins to get back to normal in the country". 

Pirelli has temporarily halted work at its UK factories of Burton on Trent and Carlisle from 23 March, with no visitors allowed on either site. Supply to clients, however, will continue by drawing on the available stock.

JCB has stopped production at all its UK manufacturing plants as disruption resulting from the worldwide Coronavirus pandemic has resulted in a reduction in global demand. The company halted manufacture on 20 March and will equally shut down for the the whole of this week at its nine manufacturing plants in Staffordshire, Derbyshire and Wrexham.Michelin North America will start a temporary, phased shutdown of some of its tyre production facilities in the US and Canada due to the broad effects of Covid-19.

Michelin North America will start a temporary, phased shutdown of some of its tyre production facilities in the US and Canada due to the broad effects of Covid-19.

20 March

Ford says it has decided to bring forward part of the summer shutdown period for its UK manufacturing operations (engine production at Bridgend and Dagenham) to the Easter period. It's another sign of the deepening short-term impact of the COVID-19 crisis on the industry and the need to adjust production to much lower market demand.

Some slightly better news, for a change. Veoneer said first quarter 2020 sales were expected to see limited negative impact from the coronavirus outbreak, mainly from the second half of March, and in the range of US$350m to $370m, including sales from VNBS Asia for January. Underlying sales for January and February were stronger than anticipated, despite negative effects from the initial coronavirus outbreak in China. New order intake to the end of February was around $160m average annual sales but the supplier now expects March activity to be limited. OEM production downtime or lower production rates are expected in Europe and North America for the next two to four weeks commencing now.

A ranking of top vehicle manufacturing companies worldwide compiled by data and analytics company GlobalData shows the impact of the COVID-19 coronavirus crisis will be strongly adverse across the industry this year, with all major companies impacted. The GlobalData ranking – which takes into account factors impacting company performance such as positioning for disruptive megatrends, as well as the impact of the COVID-19 coronavirus crisis - shows Tesla and Toyota leading the 32-strong field of automotive companies.

Tesla and Toyota top vehicle maker rankings after COVID-19 review

Japanese automakers said they would suspend production at their North American plants due to the spread of the COVID19 new coronavirus.
This was in line with recent decisions announced by GM, Ford and FCA. Toyota, Honda and Nissan announced they would shut their vehicle assembly and component production operations in the US, Canada and Mexico for two days from next Monday, as demand for new vehicles continued to weaken. Toyota said during its two day stoppage it would disinfect all facilities to minimise any potential health problems. The automaker also said it planned to suspend operations at vehicle and parts factories in an additional four countries in Europe from Wednesday, increasing the shutdown to six countries in that region. Hyundai Motor said it would suspend operations at most of its plants in the US and Europe. It had already shut down its Alabama plant on 18 March after one of its employees tested positive. Kia Motors halted operations at its Georgia plant on 19 March due to a lack of engines sourced from the group's Alabama plant. Hyundai-Kia already halted production in the Czech Republic and Slovakia for two weeks between 23 March and 3 April, due to supply disruptions. Hyundai's plant in Turkey remains operational.

Geely-owned Volvo Cars has said it is also suspending car production at its European and US plants. The Belgium plant (Ghent) will remain closed until April 5. The Swedish and US plants will be closed between March 26 and April 14, the company said. The corona pandemic is now 'severely affecting Volvo Cars in many ways, in the form of a weakening market, a risk for production disruption as well as concerns for the employees', Volvo said.

In the light of the current draconian restrictions in France, which has seen most of the population confined at home, PSA CEO, Carlos Tavares held a virtual meeting with Finance Minister, Bruno Le Maire to discuss the situation. Unconfirmed reports are also raising the prospect of some businesses being nationalised.

Skoda has suspended production at its Czech plants in Mladá Boleslav, Kvasiny and Vrchlabí for an initial period of two weeks. Operations are scheduled to restart on 6 April, while production of Skoda has resumed at Chinese plants and in India and Russia, manufacturing is continuing.

Adient is suspending its FY2020 outlook due to global economic uncertainty caused by the COVID-19 pandemic.

19 March

Although the coronavirus pandemic would trigger a sharp deterioration in European Union consumer spending in the first half of the year, the region's positive fundamentals before the outbreak would likely support consumption once the virus is contained, Moody's Investors Service said. Disruption would slow economic activity and consumption in a large number of countries, mostly in the first half of 2020. Beyond the direct consequences of the social distancing measures implemented to limit the outbreak, the extent of the impact would depend on how governments support affected companies and prevent mass redundancies. Before the coronavirus outbreak, EU consumption was growing steadily thanks to record high employment, positive nominal and real wage growth, it said. Although disruption would be severe, the overall impact would depend on the length of the lockdowns currently implemented. Durable consumer goods, such as autos, were especially exposed as the uncertainty deterred consumers from committing to all but essential purchases. Low interest rates had improved debt affordability, but leverage - measured as household debt to income - remained near historic highs in large part because of still rising house prices.

Ford said it had added US$15.4bn of additional cash to its balance sheet, drawing from two credit lines, suspended its dividend to preserve cash and provide additional flexibility, withdrawn guidance for its 2020 financial results and launched a three month payment deferral for eligible US new car customers with three more paid by for up to six months of payment 'peace of mind'.

In a move sure to have gone down well with its employees worldwide, German oil and additive specialist Liqui Moly said it was not reacting to the corona crisis with short time work or layoffs but instead paying a bonus of EUR1,000 to each worker. "With this 'corona consolation', managing director Ernst Prost is thanking all employees for their dedication," the company said. It now has almost its entire administration working from home in a move intended to protect every worker while keeping production running.

ZF is now mulling whether or not to shutter whole factories and individual product lines, "in order to follow the interruption in demand from car manufacturers."

Following the announcements of temporary manufacturing closures and the expected shutdown of much of the UK's automotive sector in the coming days, Unite, the union representing many auto industry workers, has called on government ministers to introduce measures that will ensure that no business will go to the wall due to the coronavirus crisis. "The government must ensure that the entire manufacturing sector is ready to 'leap out of the gates' when car plants and other firms that have temporarily closed due to the coronavirus reopen," Unite said.

Could the 'Detroit Three' coronavirus related plant closures continue beyond March? Following the news Ford, General Motors and Fiat Chrysler (FCA) are shutting their North American manufacturing plants through 30 March (see below), the automotive editor at GlobalData, David Leggett, said: "In a coordinated move that also involved the United Auto Workers (UAW), 'Detroit Three' US auto producers have set the closure period to 30 March with the situation then reviewed on a regular basis after that. "Given the forecast trajectory and spread of the coronavirus, it is highly unlikely that production will be able to resume soon after 30 March and that shutdowns will be extended into April at least. "Of particular importance to a production restart is a stabilisation to market conditions and there is no sign of that yet. Demand for new cars is drying up in major markets as consumers face considerable uncertainty over the economic outlook and grapple with new priorities in their daily lives. The March sales numbers are going to make for grim reading in Europe and the US. Much depends on how economies react to the crisis over the next few weeks and whether government actions and support in response to the crisis can restore already damaged consumer and business confidence."

General Motors and Fiat Chrysler (FCA) have joined Ford in shutting their North American  manufacturing plants through March 30 in response to the deepening COVID-19 coronavirus crisis. The US 'Big 3' have all coordinated their initial response to the crisis, working with the UAW. GM said it will begin a systematic orderly suspension of manufacturing operations in North America due to market conditions, to deep clean facilities and continue to protect people. The suspension will last until at least March 30. Production status will be reevaluated week-to-week after that, the company said.

GM and FCA join Ford in NA plant closures

Electromechanical parts supplier, MTA has donated EUR200,000 to several Italian hospitals following the death of former chairman, Umberto Falchetti. MTA is at the heart of the coronavirus pandemic in Italy, with its headquarters in Codogno, near Milan.

Michelin has become the latest supplier to close its production doors for "at least" a week in European countries most affected so far by the coronavirus pandemic.                                                                                        

18 March

The plant shutdowns are spreading. Production at Ford's manufacturing facilities in the US, Canada and Mexico will be halted after Thursday evening's shifts through March 30 to 'thoroughly clean and sanitise the company's plants' it said, thereby boosting COVID-19 containment efforts. The company had already said it is shuttering plants in Europe in response to the deepening coronavirus crisis. Ford also highlighted a united industry response to the crisis in the US.

Ford shutters NA plants through March 30

An e-mail sent to Tesla employees by the company's head of human resources (HR) for North America, Valerie Workman, encouraged employees to work if they feel comfortable doing so today, 18 March. The email said Tesla had received conflicting guidance from different levels of government amid the COVID-19 pandemic and shelter in place orders in Fremont, California, where its US car plant is based. Tesla North America HR head Workman sent an email to employees on Wednesday morning encouraging them to come to work, promising they would not be "docked" points in performance reviews if they chose to stay home, and explaining why the Fremont factory and other facilities were up and running amid a COVID-19 pandemic in and beyond California.

Honda North America announced it would be closing four US vehicle plants starting 23 March due to an anticipated decline in market demand related to the coronavirus. In a statement, the automaker said it would halt production for six days and planned to return at the end of the month. The hiatus would reduce production by approximately 40,000 vehicles.

Following parent company BMW's announcement earlier (see below) it was suspending output at plants in Europe and South Africa, Rolls-Royce said production at its Goodwood manufacturing plant would be shuttered from Monday 23 March for two weeks and, "in order to further secure the health and welfare of the employees of the company", that suspension would be followed by a previously planned two week Easter maintenance shutdown.

Toyota Motor Europe (TME) said associated "lock-down measures taken by various national and regional authorities, an uncertain short-term sales outlook and difficulties in logistics and supply chains are being felt and will increase in the next weeks" so it would shutter its various factories across the continent from today (18 March) until further notice.

BMW said it was suspending output at plants in Europe and South Africa (a key source of RHD cars for the African continent and export) and said its pre-tax profit and vehicle deliveries would drop significantly in 2020 as coronavirus spreads. Combined with higher research and development spending this will lower the profit margin in its automotive segment, the automaker said. The Munich-based automaker said it was preparing to suspend production at its plants in Rosslyn, South Africa and in Europe until 19 April, responding to lower demand and as a way to help reduce risk of contagion. Last Monday, the automaker said its popular BMW Welt (World), museum and group classic attractions would will be closed to the public from 17 March until further notice.

In more shuttering developments, Renault has temporarily halted production at its Revoz plant in Novo Mesto, Slovenia, while from 19 March it will do the same for its two factories in Tangiers and Casablanca in Morocco. The French manufacturer has also suspended production at its Mioveni plants in Romania, with its Cacia factory also halted due to the coronavirus.

As you can see from news over the last few days, most of the big automakers in Europe are temporarily shutting down their manufacturing plants in response to the crisis. Our editor, Dave Leggett, explains the basics of why this is happening: Automakers have no alternative but to shutter plants.    

The World Economic Forum (WEF) has published an interesting piece on the impact of the crisis on the global economy. It cites the latest assessment from the UN's Committee on Trade and Development (UNCTAD). It's a fairly sobering read, naturally, but the downturn for the global economy in 2020 being forecast at this point is to a level of economic growth of under 2% (compares with  a little under 3% in 2019), with a 'doomsday scenario' of growth slowing to just 0.5%. Not at all good, but as the chart shown in the article illustrates, we're not even close to 2009 territory yet. Europe is facing recession though.

This is how much the coronavirus will cost the world's economy, according to the UN 

17 March

Nissan stopped output at Britain's biggest car factory due to the impact from coronavirus as it assessed supply chain disruption and the drop in demand, the most significant closure to affect the country's vehicle making sector so far from the outbreak

The Volkswagen brand said late on Tuesday (17 March) it would suspend production on Thursday (19 March) for two weeks due to the coronavirus crisis, as reported earlier by local media (and see below). VW Group Components factories are also affected. Initially, production facilities in Wolfsburg, Emden, Dresden, Osnabrück, Zwickau, Bratislava (Slovakia), Pamplona (Spain) and Palmela (Portugal) are affected, as well as parts plants at Brunswick, Chemnitz, Hanover, Kassel, Salzgitter and Sitech.

Due to the worsening COVID-19 pandemic, Daimler has suspended "the majority" of its Mercedes-Benz production in Europe, as well as work in some administrative departments, for an initial period of two weeks. "By taking this action, the company is following the recommendations of international, national and local authorities," the automaker said in a statement. The suspension applies to car, van and commercial vehicle plants in Europe (some LCVs are made on an OEM basis for Renault and Nissan) and will start this week. Connected to this is an assessment of global supply chains which currently cannot be maintained to their full extent, Daimler said.

Ford has joined other vehicle manufacturers in Europe and decided to suspend operations at its European manufacturing plants in response to the deepening COVID-19 coronavirus crisis. It said that effective from Thursday, March 19, the suspension 'will continue for a number of weeks'.

Ford also suspends European production

The spread of the coronavirus will negatively impact around 16% of North American companies under its baseline economic scenario, but under its downside scenario, that figure will jump to about 45%, Moody's Investors Service said in a report published today. The credit ratings agency's baseline scenario assumes a normalisation of economic activity in the second half of 2020 while its downside scenario sees the number of COVID-19 cases surge and fear that the virus won't be quickly contained, leading to extensive travel restrictions and quarantines, as well as a protracted slump in commodity prices.

Britain has asked manufacturers, including automakers Ford and Honda plus aircraft jet engine maker Rolls Royce, to help make health equipment including ventilators to cope with the coronavirus outbreak. It has also asked British construction equipment maker JCB if it could transfer some of its skills to ventilator production as the coronavirus pandemic increasingly concentrates European governments' minds.

Meanwhile, British labour body, Unite, while saying it would back any move to produce ventilators in the national interest, is urging the UK government to "pick up the phone" to discuss how the health emergency can be managed in line with protecting the economy.

Volkswagen Group is planning to temporarily suspend production at its European plants due to the ongoing severe impact of the COVID-19 coronavirus crisis. Many plants will see their last operational shifts this Friday (20 March). VW's move reflects supply chain disruption and a rapidly deteriorating outlook for demand. VW's 2019 results were pretty good, but predictions for 2020 are 'virtually impossible', the company says, as the coronavirus crisis intensifies. 

Volkswagen calls halt to production at Europe plants

0% finance is back. Car companies in the US are looking to stimulate activity with attractive deals for consumers. General Motors and Ford are offering new vehicle financing programs designed to spur sales amid the coronavirus outbreak. GM is offering 0% financing for seven years – two years more than recent programs. Ford has announced a program giving customers who buy new vehicles the option to delay their first payment for 90 days. Could well be a buyer's market for a while yet.

16 March

Automakers in Europe react with production cuts

As the impacts of the coronavirus spread, automakers look to rein in production as market demand falls off. Fiat Chrysler (FCA) has announced today that it will temporarily suspend production across the majority of its European manufacturing plants due to the ongoing impact of the COVID-19 emergency. In a statement the company said the temporary suspension will be in effect through March 27.

Groupe PSA says it is implementing a sweeping round of plant closures across Europe for the next 11 days.

Also, Renault says its plants in Spain are closed today and tomorrow, although its French sites are 'operating normally'. Suppliers are being hit, too. Brembo announces it is to temporarily halt production in its Italian plants of Stezzano, Curno, Mapello and Sellero from today to 22 March as the effects of the coronavirus continue to be felt.

Daimler has postponed its shareholder AGM from 1 April to July.

Employee concerns over the virus and workplace protection are likely to rise, especially as many companies are now allowing (ordering even) many office-based workers to homework - but others of course do not have that option. In the US, the United Auto Workers (UAW), General Motors Co., Ford Motor Company and Fiat Chrysler (FCA) have announced they are forming a COVID-19/Coronavirus Task Force to implement enhanced protections for manufacturing and warehouse employees at all three companies. Good to see such a collaborative effort.

Nissan's US operations, too, have from today ordered those employees who can to work remotely.

Meanwhile, Aston Martin has asked a billionaire investor for another GBP20m in emergency funding after the coronavirus outbreak triggered a sales slump, piling further pressure on the struggling sportscar maker's finances.

Moody's has downgraded Tier 1 supplier Continental, citing multiple factors including "additional risks related to a global outbreak of the coronavirus and disruption of economic activity beyond the first quarter of 2020".

Virus hits key tipping point. For the first time since the outbreak started, there are more cases outside China than in it. There are currently more than 169,000 cases globally, according to Johns Hopkins University, with around 81,000 reported cases China and more than 88,000 in other countries around the globe. Useful link for general COVID-19 update - NYT.

13 March

China carmakers seek government help

After a precipitous 79% fall to the Chinese car market in February, vehicle makers in China are calling on the government for assistance and support as they tackle lost sales and supply chain disruption. Beijing has a track record for supporting the auto industry (a 'pillar' industry) with tax breaks and other measures in tough times, so the plea is not exactly surprising. The industry in China is seeking reductions to purchase taxes as well as measures to support sales in rural markets and an easing of car emission requirements. They also want extended subsidies for new energy vehicles, which have been declining as subsidies have been withdrawn.

Despite the eye-watering scale of the decline to industry sales in February, there are signs of a recovery to automotive manufacturing activity levels in China and the CAAM has said the market will recover in the coming months. It has a way to go with current plant capacity utilisation levels way below normal. On the upside, new cases of COVID-19 in Hubei province are continuing to fall quite dramatically and that trend will encourage restarts at factories.  

China new vehicle sales tumble 79% in February

It's a sign of the times and follows the cancellation - for the first time since it took a break 1940-1946 - of the 90th Geneva Motor Show earlier in the month. Automakers are  scaling back on other public events due to coronavirus risk.

Heavy truck and construction equipment maker Volvo AB has scaled back its annual general meeting after Sweden's public health agency upgraded the risk of virus spread and banned public gatherings of more than 500 people. In a statement, Volvo said its AGM would start as planned at 3.00pm on 8 April but registration would not begin until 2.15 pm. No food would be served, the customary product exhibition was axed and, to minimise the duration of the meeting, all speeches would be kept at a minimum or cancelled.

Other automakers in the UK and elsewhere have been cancelling media events both abroad and at home due to antivirus precautions. A Skoda event scheduled for Crete was moved at the last minute to the Czech Republic and then cancelled completely when that country abruptly closed its border.

After outlining a number of special measures for the XC40 PHEV media launch event planned for next week, such as no handshakes, Volvo Cars UK subsequently decided to cancel the event outright and Suzuki has cancelled an event for its new range of 48V mild hybrid models.

Media will instead be introduced to the new vehicles by press fleet loans and electronically delivered media packs.

Automakers scale back public events due to virus risk

After the recent coronavirus-led plunge on stock markets, there have been signs of some correction and limited optimism in the US. An emergency government economic support package and a Federal Reserve liquidity injection to the banking sector are expected to lift sentiment on Wall Street and take share prices a little higher, with automotive stocks also rising with the tide.

The US auto industry though, remains relatively heavily exposed in this crisis. In 2009, the US vehicle market almost halved, ultimately sending two of the then US 'Big Three' automakers into Chapter 11 bankruptcy. A decline of that magnitude is not expected this time around, but the US vehicle market is almost certainly heading for a significant demand downturn in 2020 that will negatively impact retailers as well as the OEMs and parts suppliers. Volumes and transaction prices will be under pressure, as will margins and bottom lines. The latest talk among industry insiders and commentators is of a 10% magnitude decline to the US light vehicle market this year - which would still leave it above 15m units and way over the nightmare-inducing 10m units nadir of 2009.

Coronavirus seen hitting US sales

Ford tells its workers to work at home if they can. Ford isn't the only one to go down this route for office workers and we can expect many more to follow. It's a global diktat to Ford operations everywhere, with one somewhat ironic exception: Ford offices in China (where the situation is improving, Ford says).

12 March 

FCA shows flexible response, attention turns to 2020 demand impacts

In reaction to a nationwide 'lockdown' in Italy, Fiat Chrysler (FCA) has said it is temporarily halting operations at some plants there and will reduce production rates. FCA's flexible response to the situation at plants in Italy makes sense. Maintaining plant operations will potentially be under considerable strain due to absent workers and disruption to parts deliveries, as well as new rules on 'employee distancing'. The company will also be reacting to lower orders.

FCA closing Italian plants temporarily

There are signs that the emphasis in the crisis is shifting away from supply chain disruption and impacts towards the prospect of much lower demand through 2020. China has posted February cars sales some 80% down year-on-year. While there were signs of a pick-up later in the month, there is now talk of the market for the year being down by 10% or more - something that would broadly hit many OEMs and suppliers across the world. Forecasts for the US light vehicle market are also being revised downwards towards 16.5 million, even at this relatively early stage in the evolution of the crisis there.

China passenger vehicle sales plunge 80% in February

This crisis could give a kick-start to robo-vehicles that are finding new applications in  adverse circumstances. Chinese start-up Neolix says it has experienced a massive surge in sales since the virus shocked the country earlier this year. Reports say the autonomous vehicles are being used to transport medicine, food and other goods in quarantine situations and that they can also be used to sterilise abandoned streets.

11 March

Honda and Nissan inch back to work in Hubei, China

Honda and Nissan have resumed limited manufacturing operation at factories in Hubei province. It follows signs that the public health crisis in Wuhan and Hubei is easing, with people starting to return to work after the authorities lifted some restrictions on population movements. While clearly a welcome development, the crisis in the world's largest car market and industry is far from over.

Both companies will be proceeding cautiously. They have to establish where they are with lower demand, stock levels of finished vehicles and components, and also the robustness of the supply chain and future supplies of critical parts. It will be many weeks before they will resume capacity utilisation approaching anything like normal levels.

For both companies the loss of sales in such a key market is a big issue, but especially for Nissan given the pressures on its bottom line. The additional drop to the market in China this year will further dent Nissan's already under-pressure profitability level, piling on the pressure to make cost cuts elsewhere. A poorer cash-flow position will also reduce available funds for much-needed investment.

Honda and Nissan resume manufacturing in Hubei

Also on the plus side, Renault says it has received a "tentative" restart date from Chinese authorities to start manufacturing again in Wuhan from 16 March. Renault's date next week reinforces the caution with which companies are proceeding.

Much depends on the pace of recovery in the Chinese economy and the calibration of supply to returning demand, with public health priorities remaining paramount for Beijing. If the return to work is too fast, there could be another wave of coronavirus infections and another headache for the authorities, as well as further setbacks for the economy. First gear only for now.

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more