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   

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

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, 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.

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