The COVID-19 coronavirus is impacting the auto sector in multiple direct and indirect ways, supply-side and demand-side
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The Italian government is getting closer to announcing measures to support its economy and automotive sector in the wake of the COVID-19 crisis, reports suggest. The Italian government is preparing to announce an EUR20 billion stimulus package targeted at the automotive sector and in aiding families with tax relief. The package is expected to be approved by early August. About EUR1bn is to be set aside to boost scrappage incentives for both ICE and electrified vehicles.
Toyota Motor has confirmed all of its manufacturing bases around the world were set to be operational this week for the first time since February 2020, in the initial stages of the global COVID-19 pandemic.
June 2020 output in Brazil of 98,700 units exceeded May’s tally by 129.1% but nonetheless was down 57.7% year on year. The total of 729,500 vehicles (lorries and buses included) produced year to date to 30 June was down 50.5% compared to the first half of 2019. The reason of course was the effects of the COVID-19 global pandemic.
New vehicle sales in China rose by 11.6% year on year to 2.3m units in June 2020 from 2.06m in the same month of last year. Sales last month were driven higher mainly by a 63% jump in commercial vehicle deliveries to 536,000 units from weak year earlier volume of 329,000 units while passenger vehicle sales rose by just 1.8% to 1.76m from 1.73m. June was the third consecutive monthly rise for the Chinese vehicle market after sales plunged 42% in the first quarter as the domestic economy continued to recover from the COVID-19 global pandemic.
New vehicle sales in Vietnam fell by just over 11% to 23,324 units in June 2020 from 26,217 units in the same month of last year, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA). This followed much sharper decline in the previous three months when parts of the economy were under lockdown to help limit the spread of the COVID-19 virus.
Sales of imported light passenger vehicles in South Korea increased by over 41% to 27,350 in June 2020 from 19,386 units in the same month of last year. Consumers have shrugged off concerns over the global COVID-19 pandemic and helped the market recover from the weak first quarter when vehicle manufacturers were forced to close plants due to supply chain disruptions and efforts to limit the spread of the disease.
Unsurprisingly, given global availability of Jaguar Land Rover models and the COVID-19 pandemic, Tata Motors Group global wholesales in the first quarter of fiscal year 2020/21, including JLR, fell 64% year on year to 91,594.
The sharp decline in the Philippine new vehicle market this year, due mainly to the COVID-19 pandemic, has put the government’s recently launched Comprehensive Automotive Resurgence Strategy (CARS) under threat.
Ford is facing production shortages in the US due to COVID-19 production constraints at an engine plant in Mexico. Reports said the Chihuahua engine plant was operating at just 50% capacity due to the coronavirus and that Super Duty truck production at Kentucky was in line to be impacted.
PSA‘s Vauxhall Vans plant in Luton will add a third shift, from Sunday 12 July, following negotiations with unions at several UK sites. Manufacturing at the site recommenced on 18 May with one shift after the deployment of a protocol of reinforced health measures due to the COVID-19 pandemic.
Two in five workers employed by DHL on a JLR logistics contract face redundancy, across full time, salaried and agency staff, auto workers union Unite said in a statement. The union noted DHL’s announcement of 2,200 job cuts came on the eve of this week’s UK chancellor of the exchequer (finance minister) speech to map the nation’s recovery from the COVID-19 crisis. JLR told just-auto: “Through its ongoing transformation programme and against the backdrop of the COVID-19 pandemic, Jaguar Land Rover is taking action to optimise performance and achieve further operational efficiencies to enable sustainable growth and safeguard the long-term success of our business.”
Retail sales of new passenger vehicles in China declined by 6.5% to 1.68m units in June 2020 from strong year earlier sales of 1.8m units. Compared with the previous month, sales of passenger cars, SUVs and MPVs were up by 2.6% in June, with local analysts see as a further sign that the market has stabilised from the sharp first-quarter decline due to the outbreak of the COVID-19 pandemic.
The UK automotive industry trade body, the Society of Motor Manufacturers and Traders (SMMT) said it was disappointed with the UK chancellor of the exchequer’s GBP300bn post-virus stimulus package announced on Wednesday (8 July) because there was little to aid the sector.
Fiat Chrysler Automobiles (FCA) Serbia has resumed production at its Kragujevac factory, local media reported. FCA suspended production at Kragujevac on 16 March, together with factories in Italy and Poland, due to a drop in in market demand caused by the coronavirus pandemic.
Daimler‘s annual shareholders meeting on heard the automaker was “maintaining its course in the midst of challenging economic conditions and continuing to invest in the key technologies of the future to successfully shape the transformation”. “Not least, COVID-19 has once again made it clear that we must be more careful with our environment if we want to avoid causing enormous damage to ourselves in the long term,” the automaker said.
Maruti Suzuki and Hyundai India have both reported growth in India market vehicle sales in June, compared to the previous month, as India’s vehicle market appears to be entering a recovery phase. Retail activities picked up as the country witnessed relaxation in lockdown norms in most regions starting from 8 June. Major automakers in India also report a rise in demand for personal mobility and away from public transport in current conditions.
Nissan Motor has raised JPY832.6bn including JPY712.6bn announced in late May to respond to the novel virus.
Japan‘s new vehicle market continued to decline sharply in June 2020, by almost 23% to 347,371 units from 450,398 units a year earlier. That followed a 45% year on year drop in May as domestic consumers retrenched amid rising uncertainty due to the global COVID-19 pandemic.
The new vehicle market in Taiwan expanded by 8.2% to 41,386 units in June 2020 from 38,239 units a year earlier. After growing over 8% to 104,046 units in the first quarter of the year, the market declined by 4.5% to 105,736 units in the second quarter as consumers retrenched in April and May due to rising uncertainty over the global COVID-19 pandemic.
Ford‘s China joint ventures reported year on year sales growth for June as the market continued to recover from coronavirus-induced lows.
The year over year deficit in US light vehicle sales widened in the second quarter of 2020 as the COVID-19 pandemic ruled all three months.
Figures released by the SMMT show that the UK new car market was down by 34.9% year-on-year in June. The large decline is an improvement on May’s drop (-89%), but the SMMT said the drop reflected uncertain economic confidence and the delayed re-opening of Welsh and Scottish dealerships.
Daimler’s Mercedes-Benz AG said on Friday it would start talks to sell its Smart car plant in Hambach, France, “with the aim of giving the location the best possible future prospects”. “The effects of the COVID 19 pandemic on the economy are creating new framework conditions in the market and in this context we are optimising our global production network,” the company said.
The world’s light vehicle market is forecast by GlobalData, a data and analytics company, to decline by 17.2% to 73.6 million units in 2020, due to the impact of the COVID-19 pandemic and its associated economic fallout.
Some 213 temporary workers at Ford’s factory in Romania will lose their jobs as the company faces weak demand.
Tesla’s market capitalisation now exceeds that of Toyota, making it the most valued carmaker in the world. Tesla has out-performed the sector in terms of market cap, investors viewing it as very well positioned to gain from accelerating sales of electric vehicles over the next few years.
Domestic sales by South Korea’s five largest automakers combined continued to rebound in June 2020, by over 41% to 176,468 units from 124,963 units in the same month of last year.
June 2020 new vehicle registrations in New Zealand were down 17.5% year on year to 11,514 units. Year to date volume was down 29.1% to 53,699 in a year heavily affected by the COVID-19 pandemic.
Vehicle production in Japan plunged by a record 67% year on year to 287,502 units in May, based on data provided individually by the eight main domestic vehicle manufacturers.
Chinese luxury SUV EV startup Byton reportedly has suspended operations for six months but is unlikely to resume.
The Volkswagen Passenger Cars, Volkswagen Commercial Vehicles and Volkswagen Group Components brands plan to discontinue short-time working at their German plants until further notice from 1 July, 2020. This affects Brunswick, Chemnitz, Emden, Hanover, Kassel, Osnabrueck, Salzgitter and Wolfsburg plants.
Covid-19 cases on the rise in the US brings further downside to our US light vehicle sales forecast. California, Texas and Florida are the States seeing an upsurge in cases and where demand for vehicles could be hit.
UK car manufacturing output fell 95.4% in May with just 5,314 vehicles rolling off production lines, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT). The performance was a slight improvement on April, when only 197 units were built but with factories still closed or running at reduced capacity it still marked the worst May since 1946. While some two thirds of the UK’s automotive plants started getting back to business during the month, capacity was severely held back by social distancing requirements and reduced demand, with key global markets only just beginning to reopen and the UK remaining in lockdown.
The COVID-19 pandemic impact on market demand has led General Motors to lay off the third shift at its Spring Hill, Tennessee, plant.
British union Unite is calling for a comprehensive support package to help the UK automotive sector following the SMMT’s warning that car and light commercial vehicle production is forecast to fall by a third in 2020.
FCA Italy, the wholly owned subsidiary of Fiat Chrysler Automobiles, and other Italian companies in the FCA Group have signed a three year, EUR6.3bn credit facility with Intesa Sanpaolo, Italy’s largest banking group.
Automakers are facing the realization that, while lockdown restrictions are beginning to lift in many countries, customers are still reluctant to risk their health by going to a dealership and potentially exposing themselves to infection. To mitigate the problem, Skoda launched a competition to uncover the best digital solution to selling cars in a post-COVID world. Now, the winner of the competition has been announced as Israel’s Matter.
Spanish suppliers association, SERNAUTO has welcomed the announcement by Madrid it is to pump EUR3.75bn (US$4.24bn) into the auto sector, with a focus on fleet renewal and competitiveness. “The sector welcomes this plan to boost the automotive industry value chain and urge to implement the measures as soon as possible,” said a SERNAUTO statement sent to just-auto from Madrid.
In the face of the major economic crisis facing the auto industry due to COVID-19, the European Automobile Manufacturers’ Association (ACEA) forecasts a 25% drop for EU new car sales this year. ACEA expects car sales in the European Union to tumble by more than 3 million from 12.8 million units in 2019 to some 9.6 million units this year.
The SMMT has said that the impact of the COVID-19 pandemic on the UK automotive sector means car and light commercial vehicle production is forecast to fall by a third to just 920,000 units this year. The trade association also warned that the sector needs a restart package to save jobs and pave the way for recovery.
PSA Group said unions had agreed to the voluntary temporary transfer of workers from its Ellesmere Port Astra plant and a parts centre to Luton to create a third shift to meet demand for vans.
Mazda Motor announced it would resume both day and night shift operations, without suspensions, at all plants in Japan “before the end of July”.
The SMMT has said that the impact of the COVID-19 pandemic on the UK automotive sector means car and light commercial vehicle production is forecast to fall by a third to just 920,000 units this year.
Honda and General Motors (GM) in the US are producing nearly 12,000 gallons of hand sanitiser. The sanitiser will be used by both companies at their facilities throughout the region and Honda also is donating 3,750 bottles to health care facilities.
New vehicle sales in Malaysia fell by over 62% to 22,960 units in May 2020, from 60,760 units in the same month of last year, as economic activity continued to be held back by measures put in place to slow the spread of the COVID-19 coronavirus pandemic.
The Italian government soon will approve guarantees for EUR6.3bn (US$7bn) of finance for Fiat Chrysler (FCA), two Reuters sources familiar with the matter said, paving the way for the largest crisis loan for a European carmaker. FCA’s Italian division had applied for funds from the government’s COVID-19 emergency financing schemes.
Ssangyong Motor Company does not qualify for financial support under the government’s COVID-19 market stabilisation fund, according to the South Korean government-run Korea Development Bank (KDB).
The Thailand new vehicle market fell by over 42% to 40,418 units in May 2020 from strong year earlier sales of 88,097 units, according to wholesale data compiled by the Federation of Thai Industries (FTI). That followed a 56% plunge in April, which was expected to be the low point of the COVID-19 health crisis with the economy on full lockdown that month.
So called ‘paper drivers’ are a potential market for additional car sales in Japan as workers shun public transport as the country emerges from the COVID-19 pandemic.
Nissan is to make further production cuts in Japan due to COVID-19 impacts on global vehicle demand. Nissan said it will cut production at its three Japanese manufacturing facilities – Oppama, Tochigi and Kyushi – with new production suspensions planned on dates from June 29 through July 31.
Further details have emerged concerning Spain’s EUR3.75bn (US$4.2bn) sector support plan, with a focus on fleet renewal and competitiveness.
Renault says it has no comment at this stage concerning French Secretary of State, Agnès Pannier-Runacher’s observation the automaker was “on the edge.”
Data compiled by GlobalData shows that global light vehicle sales fell 33.8% in May to 4.9 million from 7.5 million a year ago. This is an improvement on April’s showing when sales fell 47.5% bringing a record low SAAR for the global market.
Although the trip was back in April, automotive logistics specialist, GEFCO, announced today it had transported 500 tonnes of key automotive spare parts from Wuhan, China, to France by securing one of the first block trains to travel from the city since the COVID-19 global crisis forced lockdown measures.
Jaguar Land Rover parent Tata Motors booked a wider than expected loss in the fiscal fourth quarter ended 31 March, 2020 compared to a net profit in the same quarter a year ago. The automaker said: “Q1 FY21 is expected to be significantly weaker in both JLR and TML with the full impact of lockdowns being reflected in the results.”
Volvo Group plans to further decrease its white-collar workforce with approximately 4,100 positions to go in the second half of the year. It said around 15% are consultants and approximately 1,250 of these positions are in Sweden. The company said the COVID-19 crisis is negatively impacting many of its markets in the short- and medium-term.
New vehicle sales in Indonesia plunged by almost 96% to 3,551 units in May 2020 from already weak year-earlier sales of 84,146 units, according to member wholesale data compiled by industry association Gaikindo, as the impact of the global COVID-19 pandemic on the economy continued to escalate.
Volkswagen said production resumed today (16 June) at its Puebla plant in Mexico, adding all 16 VW Passenger Cars brand plants worldwide had now resumed output.
Hyundai Motor suspended production of its Palisade flagship SUV and Genesis GV80 luxury SUV on Monday (15 June) due to parts supply shortages.
That followed the temporary suspension of three assembly lines at two Ulsan plants last week after a worker at a parts suppliers died the previous day – understood to be due to the COVID-19 disease.
New vehicle sales in the Philippines continued to plunge in May 2020, by almost 85% year on year to 4,788 units. Both passenger vehicle and commercial vehicle sales fell by 85% to 1,389 units and 3,399 units respectively in May. This followed an almost total market wipe out in April when sales plunged by over 99% after the government shut down large parts of the economy on 18 March to help slow the spread of the COVID-19 coronavirus pandemic.
The Spanish government has announced an EUR3.75bn stimulus programme for the country’s automotive sector which is designed to boost recovery from COVID-19 and lift the economy. Governments across Europe are announcing schemes to boost their automotive sectors. Scrappage incentives range between EUR400 and EUR4,000 (for zero emission).
Unite, the UK and Ireland automotive industry union, has described the announcement that 1,100 agency workers at Jaguar Land Rover (JLR) factories will lose their jobs as “more devastating news for the UK’s automotive communities”. “The job losses are a result of a sharp decline in car sales as a result of the COVID-19 pandemic,” the union added.
Mahindra & Mahindra, the Indian automaker that owns a 75% slice in SsangYong Motor, has hinted at giving up control of the struggling South Korean automaker as losses from COVID-19 soar, industry sources said.
Preparations and construction of BASF battery materials plants in Europe are advancing as planned, the supplier said. “Despite the ongoing COVID-19 pandemic, the multi-step investment project is progressing as scheduled for a 2022 startup,” the company said.
Hyundai Motor Group’s Kia Motors said it was ready to begin investing an additional EUR70m (US$79m) expanding its engine factory in Slovakia. The automaker had originally planned to start expanding the plant in March but construction was postponed due to the COVID-19 virus outbreak.
New vehicle sales in China expanded by 14.5% year on year to 2.19m units in May 2020 from weak year earlier sales of 1.91m units, according to revised data released by the China Association of Automobile Manufacturers (CAAM). Last week the association released preliminary estimates showing the market had expanded 12% to 2.14m units. Passenger vehicle sales increased by just 7% to 1.67m units last month while commercial vehicle sales jumped by over 48% to 520,000 units.
New vehicle sales in Vietnam fell by just over 29% to 18,571 units in May 2020. This followed much sharper declines in the previous two months and signaled the COVID-19 low point for the country’s automotive sector has passed.
Denso International Europe is supporting research and response efforts led by Technical University Delft and the Erasmus MC Foundation to fight COVID-19.
Hyundai Motor Group affiliate Kia Motors, South Korea’s second largest carmaker by sales, halted its two domestic plants today (11 June) after two workers at the plants near Seoul were confirmed to have contracted coronavirus.
Germany plans to increase a climate protection surcharge on motor vehicle tax for new cars from 2021 so owners of ‘gas guzzlers’ such as large SUVs will have to pay much more taxes, a draft law reportedly showed. The surcharge would double for buyers of new cars with carbon dioxide emissions of more than 195g/km. The move came after top German auto industry executives had, last month, made their case to the chancellor for a new scrappage scheme needed to get Europe’s largest economy moving again.
Having restarted van production at Luton last month, PSA‘s Vauxhall now wants Ellesmere Plant workers, who normally assemble the Astra line, to transfer temporarily to the Luton van line to help it meet strong demand.
In the fourth of a series of conversations, just-auto editor Dave Leggett and GlobalData lead automotive analyst Calum MacRae discuss some of the big questions prompted by the coronavirus crisis and its potentially lasting impact on the automotive sector: D&C – Looking to the post-Covid automotive world (4)
Following what the supplier described as “a mediocre fiscal year 2019”, the COVID-19 crisis has led to a “significant decline in turnover and earnings” at Brose.
Spanish automotive suppliers are forecasting a 20%-30% drop in turnover in 2020, while employment in the sector is expected to fall between 6% and 10%.
Sales of imported light passenger vehicles in South Korea increased by over 19% to 23,272 in May 2020 from 19,548 units in the same month of last year. The import sector continued to strongly outperform domestic manufacturers.
Volkswagen of America and VW Credit, Inc. have announced the availability of remote digital signatures across the Volkswagen dealer network to offer customers and dealers flexibility during the pandemic.
In a sixth guest article written exclusively for just-auto, Dato Madani Sahari, the CEO of Malaysia Automotive, Robotics and IoT Institute (MARii), outlines how Malaysia is helping industry players to digitalise their entire business value chain for better results and performance. It’s an opportunity that the COVID-19 pandemic has further opened up.
Although vehicle handling at the Port of Gothenburg was greatly affected by the COVID-19 virus related reduction of production at Volvo companies, there already were signs of a recovery, a key logistics company said.
The European Automobile Manufacturers’ Association (ACEA) and Eurelectric said they welcomed the focus on infrastructure for electrically chargeable vehicles in the coronavirus recovery plan announced by the European Commission (EC). The associations supported the goal of funding 1m public charging points in the plan but noted this objective was already part of the European Green Deal, and that it fell well below what would be required in reality.
Nissan‘s Sunderland plant in north east England has resumed vehicle production after almost three months, with a new Juke B-SUV the first unit off the line.
In the face of the COVID-19 crisis, the Malaysian government has said it will suspend the sales tax on locally assembled cars this month until the end of 2020 following a sharp fall in sales in the first five months of the year. As part of the short term economic recovery plan announced by prime minister Tan Sri Muhyiddin Yassin, sales tax on imported cars will also be cut – from 10% to 5%.
UK auto workers union Unite claimed on Monday a proposed car scrappage scheme on its own would fail to protect domestic jobs or carmakers. The move would provide a shot in the arm for UK electric car manufacturing and for the car industry as a whole after it was devastated by the coronavirus lockdown.
Some light in the COVID-19 decimated markets gloom. New vehicle sales in China rose by almost 12% year-on-year to 2.14m units in May, according to preliminary data released by the China Association of Automobile Manufacturers (CAAM). This was the second consecutive monthly rise for the Chinese vehicle market as it rebounded from sharp declines in the first quarter due to the COVID-19 coronavirus.
Ford has said it was delaying plans for salaried workers to begin returning to offices in late June until September. It said the move was to ensure it has enough personal protection equipment for workers and time to modify facilities to allow for proper social distancing protocols to reduce the spread of COVID-19.
Japan‘s new vehicle market continued to decline sharply in May 2020, with sales plunging by almost 45% to 218,285 units from 396,120 units a year earlier, according to registration data released by the Japan Automobile Manufacturers Association.
Volkswagen owned Bentley is to cut 1,000 jobs in the UK, about a quarter of its workforce. The luxury car brand appears to have been hit by the sharp fall in demand for new cars caused by the COVID-19 crisis.
The UK new light commercial vehicle (LCV) market fell 74.1% year on year to 7,541 units in May as the nationwide coronavirus lockdown continued to impact registrations
Ford‘s China joint ventures have reported year on year sales growth for May in a sign of how the world’s largest auto market is continuing its recovery from coronavirus-induced lows.
Hyundai Motor Group reported an 18% fall in US vehicle sales to 104,786 units in May from 128,296 units a year earlier, as the COVID-19 coronavirus continued to impact demand in the world’s second-largest automotive market.
The UK new car market fell by 89% in May as it was impacted by lockdown and shuttered dealerships. However, the result was an improvement on April (-97%) with just over 20,000 vehicles delivered, helped by ‘click and collect’ services.
French Finance Minister, Bruno Le Maire has signed a EUR5bn (US$5.6bn) loan guarantee for Renault and is urging discussions start immediately concerning the future of the automaker’s Maubeuge plant.
In the aftermath of a weeks long production shutdown, General Motors is focusing on getting customers the vehicles they want, cutting the features they don’t and likely making permanent cuts to improve its cost structure.
GM now focused on efficiency
Volkswagen‘s Mexican unit said it was ready to restart operations in the states of Puebla and Guanajuato on 15 June after activity was idled in late March due to the coronavirus pandemic.
May 2020 new vehicle registrations in New Zealand were down 32% year on year to 8,313 units compared with 12,259 a year ago.
Toyota Kirloskar Motor (TKM) has announced that the company sold a total of just 1,639 units in the month of May as operations restarted and dealerships reopened across much of India.
Hyundai Motor said its provisional May sales fell 39% year on year to 217,510 vehicles globally, as the coronavirus outbreak continued to hit demand in key markets.
Seven out of 10 Japanese companies with domestic plants will revise their supply chains, a Nikkei survey showed, highlighting corporate efforts to find a new normal in light of continuing risks from the novel coronavirus.
Only 15 commercial vehicles were manufactured in the UK in April, down 99.3% year on year due to the coronavirus shutdown.
Scania plans to reduce its workforce worldwide, citing a sharp decline in revenue due to the coronavirus.
General Motors has said the restart of vehicle production at its component and assembly plants in North America has gone smoothly thanks to strong teamwork. GM said it is now in a position to increase production to meet strengthening customer demand and strong dealer demand.
Ssangyong Motor said it had sold its main service centre in Guro, Seoul, as it faced a liquidity crunch as losses continued to mount. The automaker, majority owned by Mahindra & Mahindra, said it sold the service centre to local asset management firm PIA for KRW180bn (US$147m) in a sale and lease back deal to help raise funds.
UK car manufacturing plunged by a staggering 99.7% in April as the COVID-19 crisis halted production at UK factories. Data from the SMMT showed that just 197 cars were made in Britain during the whole month.
Michelin has welcomed State backing for the automotive industry in France after President Emmanuel Macron unveiled his ambitious EUR8bn (US$8.8bn) support plan.
PSA is to produce up to 10m surgical masks per month from August, 2020 at its Mulhouse site to cover the equipment needs of Group employees and support organisations fighting against the virus. Training of teams dedicated to the project will be organised from June, 2020.
Nissan will carry out a phased restart of its US manufacturing operations beginning in early June. The company’s vehicle assembly plant in Canton, Miss. and powertrain plant in Decherd, Tenn. plan to resume production on June 1, followed by its Smyrna, Tenn. vehicle assembly plant on June 8. The Inifinti Decherd Powertrain Plant resumed limited production on May 1.
France is to plough more than EUR8bn (US$8.8bn) into its domestic automotive sector as it looks to address the myriad challenges facing the industry in the light of the coronavirus pandemic.
French President, Emmanuel Macron has hailed efforts by Valeo to cope with the coronavirus crisis as the supplier looks to gradually resume operations in an environment the Head of State said had not been seen since wartime.
Faurecia says there is the potential to create 600 new jobs in R&D and production for Zero Emission Mobility as well as Cockpit of the Future solutions, following President Emmanuel Macron’s unveiling of a EUR8bn (US$8.8bn) support package for the automotive sector.
PSA has welcomed plans by the French government to support the domestic sector, with aid of more than EUR8bn (US$8.8bn) for a range of new technology and relocalisation initiatives.
Valeo will support Paris’ EUR8bn (US$8.8bn) automotive recovery plan by locating new technologies such as 48V in France.
New vehicle sales in Malaysia plunged by over 99% to just 141 units in April 2020 from 49,935 units in the same month of last year, as the government imposed lockdown restrictions on consumers and businesses to help slow the spread of the COVID19 coronavirus pandemic.
McLaren is planning to cut over a quarter of its workforce in a restructuring plan forced by sharply lower revenues due to the COVID-19 pandemic hitting both sales and advertising revenues. The plan for 1,200 redundancies goes across all business units and would mainly impact employees in the UK.
Ford has halted production at its Kansas city assembly plant (on the Transit side) after a worker tested positive for COVID-19. The Transit van assembly area of the plant is undergoing a deep clean as result of the development. The Kansas City Assembly Plant in Claycomo, Missouri, makes the Transit van and the F-150 pickup, but only the Transit van side of the facility is affected. During the first week of the industry restart last week (May 18), Ford also shut down its Chicago Assembly Plant twice for issues related to coronavirus at the plant and involving a supplier.
CLEPA, IndustriAll Europe, Ceemet (European Tech & Industry Employers) ACEA, CECRA, ETRMA and trade unions, are calling on the EC to implement what they term a “bold” industrial recovery plan.”Such a plan should be based on two objectives: First of all, bringing the industry back on track by stimulating sales and reviving production, and secondly, supporting the industry in its journey towards a carbon-neutral future, based on the Green Deal and Europe’s climate objectives,” said a joint statement from the bodies.
France President Emmanuel Macron is currently meeting senior OEM, supplier and union representatives in Paris with a major announcement concerning support for the sector being made later this afternoon (26 May).
Car dealerships will be allowed to re-open in England on June 1 as COVID-19 lockdown restrictions are eased further. Prime Minister Boris Johnson revealed the news at the Downing Street press briefing yesterday evening. Car dealerships and outdoor markets will be able to open from 1 June, with other ‘non-essential retail’ outlets set to open from 15 June onwards. The other UK nations – Scotland, Wales and Northern Ireland – have yet to decide whether to follow.
The UK automotive industry is calling on government to allow the country’s 4,900-strong network of new car showrooms to re-open as a matter of urgency. The UK auto industry’s trade association, the Society of Motor Manufacturers and Traders (SMMT) also said there is a GBP61 million daily cost to the UK Treasury of keeping dealerships closed.
General Motors on Thursday said it was gradually restarting the transmission and engine lines at its Mexican facilities in Silao and Ramos Arizpe, while supplier Lear also geared up for production.
Paris has delivered an indication to Renault its wish to see sites preserved in France as speculation swirls the future of some plants is being reviewed.
TrueCar is to continue financial payment relief for its dealer customers through June.
Ford shut down its Dearborn Truck Plant on Wednesday afternoon after learning a worker tested positive for coronavirus and released its early shift about 1:30 pm.
In a call with investors and analysts Exor NV – FCA’s largest investor – has confirmed the timing for the proposed FCA-PSA merger for completion by early 2021 as initially announced. FCA and Exor chairman John Elkann said the terms of the merger agreement were unchanged and that the rationale for the merger was ‘stronger than ever’ now that the COVID-19 pandemic adds to the list of challenges facing the automotive industry.
Renault has acquired a mask production line to be based at its Flins plant in France and capable of manufacturing up to 1.5m surgical masks per week.
PSA’s annual General Shareholders Meeting will be held on 25 June, 2020 behind closed doors.
Ford Romania doubled operations at its Craiova factory from one to two shifts (of three) on 18 May.
Webasto has posted first-quarter sales down 18% to EUR708m (US$775m), while EBIT dropped to EUR-40m compared to EUR24m the previous year.
The first Range Rover made under new social distancing measures drove off the production line at Tata Motors owned Jaguar Land Rover‘s assembly plant in Solihull, England, today following the recent temporary pause in production due to the coronavirus pandemic.
In the third of a series of conversations, just-auto editor Dave Leggett and GlobalData lead automotive analyst Calum MacRae discuss some of the big questions prompted by the coronavirus crisis and its potentially lasting impact on the automotive sector. In this third instalment, they consider demand-side issues.
D&C – Looking to the post-Covid automotive world (3)
South Africa‘s Department of Trade, Industry and Competition has detailed directions regarding the sale of cars and emergency vehicle repairs during Level 4 lockdown.
Despite the COVID-19 pandemic in the final quarter, Mitsubishi Motors still managed to make an operating profit in fiscal 2019/20 ended 31 March, 2020.
France has dropped a further hint it will introduce an incentive scheme to kick-start the country’s moribund market, which plunged 86% last month as the sector reels from the effects of the coronavirus pandemic.
Gestamp has recorded first quarter net income down 66% to EUR14m (US$15m), as the impact of the coronavirus pandemic is felt.
Japan‘s new vehicle market plunged by close to 29% to 270,393 units in April 2020 from 378,687 units a year earlier, according to registration data released by the Japan Automobile Manufacturers Association (JAMA).
New vehicle sales in Indonesia were forecast to fall by 40% to around 600,000 units in 2020, from just over 1m units in 2019, as the global COVID-19 pandemic continued to ravage the economy.
Data released by ACEA for European region new car registrations during the month of April (EU27+EFTA+UK) shows a 79.8% year-on-year decline with the market at just 245,483 units. ACEA said the first full month with COVID-19 restrictions in place resulted in the strongest monthly drop in car demand since records began. With most showrooms across the EU closed for the entire month, the ACEA data was not unexpected and also confirms data published on just-auto earlier this month.
Denso and Global Mobility Service (GMS) are to support the delivery of polymerase chain reaction (PCR) testing kits, which detect COVID-19 and the raw materials for the kits to medical institutions, testing organisations and pharmaceutical companies in Indonesia.
GM‘s chief financial officer said vehicle sales for the automaker and the US auto sector were trending in a positive direction as the sector recovered from the coronavirus pandemic.
At the end of March, Novares received a cash injection of EUR45m from its shareholders Equistone and BPI, allowing it to reopen 13 of its 19 European production sites.
The president of General Motors’ Mexican unit reportedly has advised suppliers to prepare to resume operations after the Mexican government said the automotive industry could exit the coronavirus lockdown before 1 June with adequate safety measures.
Bosch has started fully-automated production of facemasks at its plant in Stuttgart-Feuerbach.
Daihatsu is to suspend production at some Japanese plants due to a shortage of overseas sourced components and low demand.
PSA and FCA have each decidednot to distribute an ordinary dividend in 2020 related to fiscal year 2019, in light of the impact from the current COVID-19 crisis.
Fiat-Chrysler (FCA) is working with the Italian government to secure an EUR6.3bn state-backed loan guarantee aimed at helping its Italian supply network’s liquidity and supporting the restart of vehicle production at FCA’s Italian manufacturing facilities.
New UK government furlough rules will help firms manage irregular workloads as the economy recovers from the COVID-19 crisis, says the Road Haulage Association (RHA).
French Finance Minister, Bruno Le Maire has raised the possibility of a “reinforcement” of automotive conversion incentives, but stresses it might be among a range of measures to support the beleaguered industry.
Britain’s Road Haulage Association (RHA) is urging the government to do more to help truck operators recover from the COVID-19 crisis.
Britain’s Freight Transport Association (FTA) says it is keen to see more flexibility incorporated into the UK government’s furloughing scheme.
Pirelli UK is to recommence production at its plants in Carlisle and Burton-on-Trent from 18 May.
The Federation of Thai Industries (FTI) is urging the Thai government to introduce scrappage incentives to help the domestic vehicle market recover quickly from the COVID-19 pandemic, according to local reports.
South Korea still plans to stage the – postponed – world’s first hydrogen mobility energy show this year, as it looks to secure its global leadership in hydrogen fuel cell powered vehicles and related industries.
Vehicle sales plunged in the ASEAN region in March following COVID-19 lockdowns. Sales of new vehicles in southeast Asia’s six largest markets combined are estimated to have declined by over 19% to 700,528 units in the first quarter of 2020, according to data collected exclusively for just-auto from local industry sources including vehicle manufacturers, trade associations and government departments.
After tentatively restarting car production at European plants in recent weeks, reports say Volkswagen is pausing production on some assembly lines in Germany due to low market demand. Media reports cite internal VW communications that say the company will bring a halt to two assembly lines at Wolfsburg while another will have much reduced hours of operation this month. The suspension will reportedly mainly hit Tiguan, Touran and SEAT Tarraco models but with Golf output also impacted.
CEOs from across the automotive value chain held a virtual meeting with the European Commission to agree priorities for a solid recovery plan for the automotive sector, with a view to stimulating the wider economy.
The UK automotive manufacturing sector has announced its preparedness to get production lines rolling again, with the publication of new sector-specific guidance by the Society of Motor Manufacturers and Traders (SMMT).
Ford is making ventilator subassemblies for the National Health Service (NHS) in the UK after transforming an empty warehouse into a manufacturing facility in record time.
VW-owned Bentley has now resumed production at the company’s headquarters in Crewe, England, with over 1,700 workers following some 250 ‘comprehensive and wide-ranging hygiene and social distancing guidelines implemented to enable a safe return’. Bentley says lines are running at 50% capacity utilisation.
Cooper Tire Europe plans to start the process of reopening its manufacturing plant in Melksham, England, in the first half of June and expects to be manufacturing by 15 June.
Mitsubishi Electric is to support healthcare professionals in the fight against COVID-19 by donating around US$930,000 and providing medical institutions with essential items such as masks.
Having put employee protection measures in place, PSA Group plans to resume van production at its factory in Luton, England, on 18 May.
Ford said it would restart “initial production” at its Dagenham engine plant in Essex, east of London and Bridgend engine plant in south Wales from 18 May.
Jaguar Land Rover owner Tata Motors announced a restart of Indian manufacturing operations for both commercial and passenger vehicles at plants in Pantnagar (Uttarakhand), beginning last week, and at Sanand (Gujarat).
Hyundai Motor Group on Tuesday said it had resumed operations at most of its overseas plants amid signs that the global COVID-19 pandemic may have passed its peak.
New vehicle sales in Vietnam plunged a further 46% to 10,816 units in April 2020 from 20,127 units in the same month of last year
Volkswagen in China is reporting that sales have recovered sharply after the COVID-19 slump that hit the market hard in the first quarter. It now says there is a big shift towards online sales and reducing human contact in a digital sales process. Michael Mayer, head of sales and marketing for VW in China, provides an update.
French Finance Minister, Bruno Le Maire says he “regrets” the decision by the CGT union to bring action halting activity at Renault’s Sandouville plant in the north of the country.
France’s Finance Secretary has accused union officials of “playing with fire” and took aim at the CGT labour body’s decision to secure a temporary halt to Renault’s restart of its Sandouville factory in the light of efforts by Paris to encourage a shift back to domestic manufacture.
Citing the global Covid-19 pandemic as the main factor, Porsche said its first quarter after tax profit of EUR99m was down on EUR1.2bn a year ago.
Honda Motor booked an operating loss for the fiscal fourth quarter ended 31 March 2020 of JPY5.6bn, a year on year plunge of JPY47.9bn
Ford engineers have found new ways to develop and test OTA updates in the midst of the coronavirus pandemic.
Arlington Automotive has entered administration in the UK, potentially threatening 600 jobs.
AAM has posted a first-quarter net loss of US$501.3m, while sales fell to US$1.34bn compared to US$1.72bn the previous year.
Valmet Automotive says it has restarted car production this week at its Uusikaupunki, Finland car plant. Production has been suspended since April 3 due to lack of components caused by the COVID-19 pandemic. All Valmet Automotive plants are now operative, including the battery plant in Salo, Finland and the roof and kinematic systems plant in Zary, Poland.
Toyota plans to cut production in North America by nearly a third to the end of October due to the coronavirus crisis and expects it will take some time for output to return to normal, a news agency report said.
Lear has reported first-quarter net income down to US$76m from US$229m, while sales fell to US4.5bn from US$5.2bn.
Toyota Motor and Mazda Motor both recorded rises in car sales in China in April, their first monthly increases since the novel coronavirus broke out in January, and an indication of the possible return of consumer demand.
Honda is gradually car, engine and transmission production at its plants in the US and Canada from today, Monday 11 May.
Magna has reported first-quarter sales down 18% to US$8.7bn in the light of the coronavirus crisis.
European supplier association, CLEPA says a survey of automotive supplier companies on the Continent to gauge the impact of the coronavirus crisis, shows the sector’s outlook has worsened considerably during the past weeks.
China’s vehicle market returned to annual growth in April as the market and industry continued to recover from the coronavirus crisis. The April market was up 4.4% over last year at 2.07m units according to data from the China Association of Automobile Manufacturers (CAAM).
ZF is gradually restarting production in Europe and the Americas as it looks to align with customer ramp-up.
Mazda Motor at the weekend approached three leading local banks and other lenders in Japan to secure JPY300bn (US$2.8bn) in fresh loans, as the company struggles under the impact of the COVID-19 coronavirus.
Hyundai Motor said it had issued KRW600bn (US$493m) of new bonds amid strong investor demand, twice the amount originally planned, with the company looking to strengthen its balance sheet as the COVID-19 coronavirus continues to impact its global vehicle sales.
Ford says it is planning to resume production and operations in North America beginning May 18, taking a phased approach. General Motors is also planning to restart production in North America on the same date. Ford will also begin returning some team members whose jobs cannot be done remotely such as vehicle testing and design, to work beginning May 18, including approximately 12,000 personnel in North America.
Thermal camera maker Flir Systems will supply General Motors with scanners to detect fevers among workers when they return to car factories, the companies said.
Nissan said it was extending production downtime for most of its manufacturing facilities in the US indefinitely.
Taiwan’s new vehicle market declined by just over 11% to 30,822 units in April 2020 from 34,680 units a year earlier, according to local reports citing registration data compiled by Taiwan’s Directorate of Highways.
Domestic sales by South Korea’s five largest automakers continued to rebound in April 2020, by 6.5% to 145,141 units from 136,296 units in the same month of last year, according to preliminary data released individually by the companies.
The COVID-19 crisis saw West European new car registrations fall by 80% year-on-year (YoY) in April, according to data released by LMC Automotive. As the impact of lockdowns and shuttered dealers took hold across the region, the regional selling rate dropped to just 2.8m units a year. It was an even sharper drop than the previously unprecedented 52.9% fall to regional car sales in March. Market with the biggest April fall? Italy (at -97.6%) followed closely by the UK (-97.3%).
West European car market down 80% in April
PSA has elaborated on its health and teleworking measures as the manufacturer looks to manage the coronavirus crisis.
BorgWarner has recorded first-quarter net sales down 11.2% to US$2.3bn.
Delphi Technologies has posted a first-quarter operating loss of US$20m compared to operating income of US$55m in the prior year period.
Ford said it had shipped the first powered air purifying respirators (PAPR), developed with 3M, to help protect health care workers fighting COVID-19.
UK light commercial vehicle (LCV) registrations fell 86.2% year on year in April 2020 as the coronavirus shut down the market, the Society of Motor Manufacturers and Traders (SMMT) said.
Ford said vehicles again were rolling off production lines at factories in Germany, Romania and Spain following a seven week production suspension in response to the COVID-19 crisis.
BMW has reported a sharp fall in quarterly deliveries and warned that the decimation of demand in major automotive markets will impact its annual profits in 2020. The BMW Group delivered a total of 477,111 BMW, MINI and Rolls-Royce brand vehicles to customers worldwide in the first three months of 2020, a 20.6% fall on the same period of 2019.
New Zealand’s Motor Industry Association said April 2020 registrations were down 90% (9,601 units) year on year, as expected, with 1,039 new vehicles sold compared to April 2019 with 10,640 sales.
Fiat Chrysler Automobiles (FCA) said first quarter 2020 results reflected impacts from the COVID-19 outbreak with a net loss of EUR1.7bn.
Romanian carmaker Automobile Dacia, owned by Renault, resumed operations at Mioveni, near Pitesti, on Monday, 4 May while Ford also restarted its car plant in Craiova, southern Romania, the same day. Both producers suspended operations after a state of emergency was decreed in Romania due to the COVID-19 pandemic.
New vehicle sales in Australia fell almost 50% year on year in April 2020. “Clearly, the COVID-19 pandemic has had a major influence on the April sales result, and reflects a downturn in the broader economy right across the country,” a local trade group said.
Hyundai Motor Group (HMG) restarted manufacturing operations in the US after more than a month of shutdowns after it introduced measures and policies to safeguard its staff against the COVID-19 coronavirus.
Shanghai based SAIC Motor reported a slight year on year rise in global sales in April 2020, of 0.5% to 433,000 units, after a steep decline in the first quarter of the year due to the outbreak of the COVID-19 coronavirus in the country.
UK new car sales in the month of April fell by a staggering 97.3% as the market was effectively frozen under COVID-19 lockdown rules that shuttered dealerships across the nation. The SMMT said 4,321 new cars registered in the month as deliveries continued to frontline workers and organisations.
Europe’s automotive industry is proposing a 25-point action plan to ensure a strong restart of the sector and the economy at large.
RHA chief executive, Richard Burnett has written to British Chancellor of the Exchequer (Treasury Secretary), Rishi Sunak, urging him to help thousands of hauliers avoid insolvency.
GM Korea will cut May 2020 output at the factory building the Trailblazer SUV, as the coronavirus outbreak slowed US exports and also disrupted parts supplies.
Recovery in China – General Motors achieved double digit year on year growth in April 2020 at its two Chinese joint ventures.
PSA is to gradually restart production in the coming weeks with a first wave of partial reopening of industrial activity between 4 and 11 May, (from 11 May in France), taking into account the commercial context (ending lock-down, reopening of dealers, the commercial, situation of each model).
Mahindra & Mahindra exported only 733 vehicles during April 2020. Domestic sales of vehicles during the month were “completely impacted by the ongoing Covid-19 pandemic and resulting national lockdown”, the automaker said. Mahindra & Mahindra exported only 733 vehicles during April 2020. Maruti Suzuki reported zero domestic sales and even fewer exports than M&M.
Nissan Motor‘s Jupiter Spirit car carrier, laden with about 2,000 Armada SUVs, Rogue crossovers and Infiniti sedans arrived recently to a Los Angeles harbour after a three week journey from Japan to face a full ‘parking lot’ due to the COVID-19 sales slump and had to anchor a mile offshore.
Based on an extensive review with its supplier and logistics network, Toyota has said it will postpone the ramp-up of its North American manufacturing operations from the week of 4May to the week of 11 May.
Pirelli is gradually returning to work today (4 May) with a plan aimed at ensuring maximum protection of employees’ health and workplace safety.
Cummins has entered into an agreement providing for an additional US$2bn revolving credit facility, which terminates on 30 April, 2021.
Volkswagen of America has reportedly put back the restart of production at its assembly plant in Chattanooga amid concerns about the readiness of the company’s supply base.
It’s a quite staggering number. The new car market in the Republic of Ireland fell by 96% year-on-year in the month of April due to the COVID-19 lockdown in the country. Get ready for more big lockdown-induced national vehicle market reversals in the April market numbers out next week.
Skoda has restarted production of high-voltage traction batteries for VW Group PIH models at its Mladá Boleslav plant, employing what it says are comprehensive hygiene measures.
Honda of America has begun producing and delivering components for the production of ventilators to Dynaflo.
Tata Motors’ Jaguar Land Rover is scaling up production of protective face visors to support the fight against coronavirus.
Daimler said on Friday Mercedes-Benz car plants in Untertuerkheim, Berlin, Hamburg, Sindelfingen and Bremen had restarted production after a period of short time working or suspension due to the COVID-19 outbreak.
Employment provider, Adecco says it is acting “in accordance with both the letter and spirit” of the UK government’s job retention scheme in the light of labour body, Unite’s claim it prevented around 200 agency workers based at Bentley’s site in Crewe being made redundant.
BYD has donated 100,000 facemasks to Hungary.
Audi is offering its customers an extension of new car and extended warranties. It says the measure is being introduced short-term in many markets around the world as many customers have been, or still are, unable to visit an Audi dealership and report their warranty claims due to the ongoing COVID-19 crisis.
Ford said it was now producing face masks in the UK and face shields at other sites in Europe for employees working during the COVID-19 crisis.
Heavy truck component supplier Meritor said sales fell 25% year on year to US$871m in its second fiscal quarter ended 31 March 2020.
European Commission (EC) authorities have approved a French aid measure consisting of a EUR5bn (US$5.4bn) loan guarantee to Renault to mitigate the economic impact of the coronavirus outbreak.
Bosch has posted 2019 sales revenue down 0.9% to EUR77.7bn (US$84.4bn) as the manufacturer “steels itself” for a 2020 recession.
Renault has appointed Joji Tagawa as a director proposed by Nissan.
Goodyear has posted a first-quarter 2020 net loss of US$619m compared to US$61m a year ago, while Q1 sales were down 15% to US$3.1bn.
Heavy truck suspension and braking specialist Haldex said it had extended short-term layoffs for most employees in Landskrona, Sweden, first introduced on 30 March and affecting 250 workers.
Volkswagen Passenger Cars is extending warranty for new vehicles by three months due to dealer closures caused by the COVID-19 pandemic.
UK commercial vehicle (CV) production fell 41.8% year on year in March to 5,219 units according to Society of Motor Manufacturers and Traders (SMMT) data. Nationwide coronavirus lockdown measures forced plants to close part way through March 2020.
UK car output fell 37.6% in March, according to figures released by the Society of Motor Manufacturers and Traders (SMMT) as the COVID-19 crisis shuttered plants. Just 78,767 vehicles left British factory gates in the month, some 47,428 fewer than the previous year, as the coronavirus crisis caused UK car plants to close, resulting in more than 140 days-worth, in total, of lost production.
AD Plastik says one of its principal customers, Slovenian manufacturer, Revoz, has restarted business operations.
Visteon has posted a first-quarter net loss of US$35m compared to US$14m net income in 2019.
UK engine production fell 40% year on year in March 2020 as the coronavirus lockdown hit output.
Global light vehicle sales fell 39% year on year to 5.55m units in March 2020, according to new analysis.
Volkswagen said the COVID-19 pandemic had “a substantial impact” on business in the first three months of the year.
Toyota Motor said its global vehicle sales, including Lexus, Daihatsu and Hino, fell by 22.6% to 779,151 units in March 2020 due to the global COVID-19 pandemic.
Malaysia’s new vehicle market plunged by almost 59% to 22,478 units in March 2020 from 54,776 units in the same month of last year, according to registration data released by the Malaysian Automotive Association (MAA). Consumer and business confidence in the country began to weaken significantly in February when the seriousness of the COVID-19 coronavirus threat to the world became more evident.
Geely’s Volvo Cars said 1,300 white collar job cuts were part of the ongoing realignment of operations in line with long term ambitions and need for structural cost reduction but the coronavirus pandemic had “increased the pertinence of the measures announced”.
As expected, Ford has confirmed a set of downbeat quarterly financial results that indicate the depth of the reversal caused by the COVID-19 pandemic this year. The company also took the opportunity to save money and put the brakes on investment in autonomous vehicles (AVs).
Ford posts $2bn quarterly loss, puts brakes on AVs
Cash focused Ford has also confirmed that the company will no longer proceed with a programme to develop a Rivian architecture EV for Lincoln.
Renault has updated its operational situation in Busan, South Korea, noting the plant will close for four days: 4 May and from 6 May – 8 May.
Cummins has posted first-quarter net income down 23% to US511m, while revenue fell 17% to US$5bn.
Renault has updated its operational capability as the manufacturer looks to gradually resume production at its many European, North African, South American and Asian plants.
Britain’s Road Haulage Association (RHA) is ‘imploring’ the UK government to do more to save thousands of logistics firms, who face what they term ruin as a result of the coronavirus crisis.
Nissan has filed a notice with the Tokyo Stock Exchange to report that the company’s consolidated earnings for the fiscal year ended March 31, 2020, may ‘differ by more than 30% from the previous financial forecast announced in February’. The company cited a continued decline in the company’s performance resulting from the impact of the COVID-19 pandemic and the possible booking of a one-time loss. It would be Nissan’s worst annual results since 2008.
Nissan cuts annual results forecast due to COVID-19
Historic lows are expected in April as the full effects of COVID-19 are felt across the US new passenger vehicle market for the entire month, a forecaster predicted.
Ford said it plans to restart production at most of its main continental European vehicle and engine plants from 4 May.
Upholstery materials supplier Alcantara has reopened its Nera Montoro production and R&D facilities north of Rome. It had closed the facility, which has 500 employees, voluntarily late in March in response to the COVID-19 crisis although it was an Italian business authorised to stay in production.
Brembo has restarted some of its activities in the Italian plants of Curno, Mapello and Sellero today (28 April), temporarily suspended on 16 March, due to the emergency situation generated by the coronavirus pandemic.
Continental has recorded first-quarter consolidated sales down 11% to EUR9.8bn (US$10.7bn), a number it says is “above own expectations.”
Eberspaecher is preparing the gradual start-up and re-start of production in around 40 plants worldwide.
Renault Samsung Motors said it would suspend operations at its sole plant located in the South Korean city of Busan this week for 11 days as the COVID-19 coronavirus pandemic continues to hold back its sales worldwide.
General Motors will suspend quarterly dividends and stock buybacks as well as extend a $3.6bn revolving credit facility in order to bolster its cash position during the COVID-19 pandemic.
Michelin has resumed tyre production at its factory in Zalau, western Romania.
Nissan Motor will cut vehicle production in Japan by 70% in May and 43% in June, according to a news report.
Our analysis shows that the global light vehicle market hit a seasonally adjusted annual running rate (SAAR) of just 54 million units in March, which compares with almost 90 million light vehicles sold globally in 2019. The decline in trend in the first quarter of the year is sharp and stark. The 54 million units SAAR figure for March compares with a SAAR of 67 million units in February and just under 80 million units in January.
COVID-19 causes global auto industry running rate to dip to a historic low
Veoneer, currently selling yet to be launched US brake control programmes to an unnamed supplier to focus on its core electronics business, said first quarter sales fell 27% year on year to $362m. It has withdrawn its full year forecast due to the coronavirus crisis but said its operating loss was expected to improve.
Mitsubishi Motors said it expected to book a JPY26bn (US$242m) net loss for the current fiscal year ending 31 March 2021 after forecasting a net profit of JPY5bn last November, as revenue continued to fall sharply due to the COVID19 coronavirus pandemic.
The production of vehicles at Volkswagen’s main Wolfsburg plant in Germany has begun today, after weeks of shutdown due to the impact of the COVID-19 crisis. The first vehicle to be produced is a Golf and VW said that production will start at 10 to 15 percent of capacity, increasing to around 40 percent over the following week. The company also said a 100-point plan provides maximum health protection for employees.
Daimler Buses has converted an inter-city vehicle for the transport of Covid-19 patients at its plant in Neu-Ulm.
Hyundai Motor Group (HMG) this week said it would suspend production at a number of domestic and overseas vehicle assembly plants to help manage inventory as global demand continued to plunge due to the COVID19 pandemic.
Renault says it is aiming to restart production in its Flins plant north-west of Paris at some point next week once appropriate hygiene measures are put in place.
After its global debut was cancelled by the last minute axing of this year’s Geneva show, Toyota unveiled – virtually – its new compact SUV to the world this week, the Yaris Cross, based on the same the TNGA compact car platform used by the latest generation Yaris subcompact passenger car announced last October. The show was cancelled due to social restrictions imposed by the Swiss government because of the COVID19 pandemic.
A new report said operating revenue in the south east Europe automotive industry, among the hardest hit by the Covid-19 crisis, was expected to fall dramatically, as the aggregate losses for the region’s automotive sector could exceed EUR8bn (US$8.6bn).
Some good news, for a change. Toyota Australia has boosted its orders for RAV4 Hybrids for the second half of 2020 by 8,000 units. This followed earlier reports Toyota was expected to halve May output in Japan due to a lack of demand caused by the coronavirus.
The UAW labour union in the US has said that plans to restart automotive manufacturing in early May are ‘too soon’ and ‘too risky’ to its members. The US auto companies have been planning to start up manufacturing operations in Michigan from May 4, but the latest UAW statement places doubt on that date.
Jaguar Land Rover plans to gradually resume production from 18th May, starting with manufacturing plants in Solihull in the UK as well as in Slovakia and Austria. It says its JV plant in China has been operating since February.
Valeo has posted first-quarter consolidated sales down 8% on a like-for-like basis to EUR4.5bn (US$4.8bn).
Valeo is to hold its General Shareholders Meeting behind closed doors on 25 June in the light of the coronavirus outbreak.
The global COVID19 pandemic has had a significant impact on the Thai vehicle market so far this year with volume decline accelerating in March as the government implemented increasingly strict lockdown policies to help slow the spread of the virus.
Hyundai Motor has announced a first quarter 2020 year on year revenue rise of 5.6% to KRW25,319bn, though the comparison with Q4 2019, down 9%, was less flattering.
Facing low demand, Toyota was expected to cut May vehicle production in Japan by about half from the level expected at the end of March, according to Nikkei, cited by SeekingAlpha which noted the automaker was expected to reduce output at all 18 assembly plants in Japan.
Honda Motor announced it would halt production at two vehicle assembly plants in Japan next week due supply chain disruption caused by the COVID19 coronavirus pandemic, according to local reports.
Preliminary quarterly earnings from Daimler show a big COVID-19 crisis induced decline and the company has also warned of a much weaker outlook for the year. Daimler Group EBIT for the first quarter was put at EUR617m, 78% down on last year’s Q1 result. Adjusted EBIT for the first quarter was EUR719m, 69% down on last year’s pace. Daimler won’t be alone in reporting a large COVID-19 crisis hit to financial results this year.
Renault has recorded first-quarter Group revenue down 19.2% to EUR10.1bn (US$10.9bn), while the manufacturer also posted sales falling 26% to 672,962 vehicles as the coronavirus pandemic continues to cause uncertainty.
Ricardo has delivered the first 2,000 of its purpose-designed protective faceshields as part of its effort to support UK care homes and National Health Service (NHS) Trusts.
Grupo Antolin has posted 2019 sales down 4% to EUR5.2bn (US$5.6bn), while EBITDA increased to EUR435m from EUR356m.
UK labour body, Unite maintains it has prevented around 200 agency workers based at Bentley’s site in Crewe being made redundant by employment provider, Adecco, while the car manufacturer started ceasing production due to the Covid-19 health crisis.
Fiat Chrysler plans to resume production of Ducato light commercial vehicles at its Sevel plant in central Italy on 27 April, a week before a national lockdown imposed by the Rome government is due to end, unions told local media.
Nissan said on Wednesday (22 April) vehicle production in Spain, suspended since 13 March there, the UK since 17 March and in Russia since 30 March, would resume slowly from 27 April.
Fiat Chrysler Automobiles has drawn down on a EUR6.25bn (US$6.79bn) credit line to cope with the coronavirus health crisis, a media report said.
Hyundai cranked up South Korea output for the US just as factories in that key export market were shuttering production in March due to the coronavirus pandemic, a move that is now proving costly, a media report said.
South Korean vehicle manufacturers this week called on the government to provide up to KRW32 trillion (US$25.9bn) in emergency loans through banks to help them through the global COVID10 coronavirus pandemic.
In response to a US shortage of personal protective equipment (PPE) caused by the COVID-19 pandemic, Kia has announced that production of face shields has begun at its manufacturing plant in West Point, Georgia. Initial donations of medical use face shields assembled at Kia Motors Manufacturing Georgia (KMMG) will be made in Georgia, Alabama, New York and California.
Valeo has signed a majority Group-wide agreement with the CFE-CGC, CFDT and FO labour organisations, with the goal of ensuring protection for employees and allowing operations to be gradually resumed.
Europe’s Automotive Suppliers Association (CLEPA) and ACEA have jointly adopted a ‘Code of Business Conduct in view of Covid-19’ to support a smooth restart of the automotive industry.
PSA chairman, Carlos Tavares has informed the board he intends to reduce his long-term compensation 2020, by 50,000 shares, equivalent to 35% of his fixed compensation and 38% through the LTI 2020 plan.
Nissan Motor said it would shut its global headquarters in Japan for 16 days until early May to contain the spread of the coronavirus, even though the government has permitted keeping workplaces open to get the economy running.
Supplier company Linamar has issued an operations update in which it says tentative partial restart of closed facilities in North America is planned for the week of May 4th, in line with automotive OEMs.
Mitsubishi Motors Corporation (MMC) said it would postpone the announcement of financial results for the fiscal year ended 31 March, 2020, which was scheduled for 13 May, blaming the global virus outbreak.
Hyundai Motor Group earlier this week said it was cutting executive salaries by 20% as part of its efforts to weather the escalating COVID19 global pandemic.
GM is expanding its manufacturing of personal protective equipment (PPE), including latex-free face shields, protective gowns and aerosol boxes. All of these supplies are being donated.The projects have been led by employee volunteers looking to apply their automotive-production skills – from 3D printing to sewing upholstery – to help those on the front lines of the coronavirus pandemic.
Tata Motors owned Jaguar Land Rover retail sales in fiscal 2019/20 (to 31 March, 2020) were down 12.1% year on year to 508,659 vehicles, “primarily as a result of the coronavirus pandemic significantly impacting sales in the fourth quarter of the fiscal year”.
Sales by Ford and its joint ventures in China fell 34.9% year on year in the first quarter. “Amid an unprecedented business slow down due to the COVID-19 pandemic, Ford’s quarterly sales declined… but fared slightly better than the industry,” the automaker said.
PSA Group is readying its Ellesmere Port Vauxhall/Opel factory in Britain for reopening but has yet to confirm a date. It said the plant has remained “active” and implemented a protocol of reinforced health measures.
As Korean vehicle makers, notably Hyundai and Kia, are forced to halt production due to lower global demand, an analyst has warned that the global coronavirus crisis will negatively impact South Korea’s domestic industry in the first half of the year. This is in spite of the country’s relatively successful handling of the public health crisis.
New vehicle sales in Indonesia declined by almost 15% to 76,800 units in March 2020 from already weak year earlier sales of 90,189 units, according to member wholesale data compiled by industry association Gaikindo, as the impact of the global the COVID19 pandemic on the country’s economy continued to escalate.
Tesla opened an official virtual store on China’s Tmall site last week, as the US electric vehicle manufacturer continues its efforts to expand its share of the world’s largest vehicle market. Tmall is a leading business to consumer e-commerce platform owned by internet giant Alibaba Group, providing vital exposure to Chinese consumers at a time of social distancing due to the COVID-19 coronavirus pandemic.
Even as the unprecedented global COVID-19 public health crisis is yet to reach a peak in many countries, a number of carmakers and major component companies are now talking about restarting temporarily shut down plants later this month or in early May. However, all industries are different and some will find it easier to swing back into action than others. Fragile supply chains mean the automotive industry is one that will face considerable challenges on the path to getting back to (or close to) where it was pre-COVID.
Fragile automotive supply chains will complicate factory re-starts
ArcelorMittal is partnering with researchers and medical professionals in Spain to produce ventilators in information released earlier this month (6 April).
UK automotive supplier, Interflex has offered its premises and equipment for the production of PPE or other essential products in the fight against Covid-19.
Volvo Cars‘ main manufacturing plant in a suburb of Gothenburg will be brought back online on Monday. Torslanda powered down on 26 March.
Ford, in a US regulatory filing said it expects a Q1 net loss of US$2bn. In an earlier filing dated 13 April, it announced certain some first quarter 2020 financial results but was unable to include its expected net income/(loss) for the quarter because it had not yet calculated its preliminary tax expense. Announcement of first quarter financial results, including estimates of the economic effects of the COVID-19 pandemic on the business, is planned for 28 April.
General Electric and Ford will produce 50,000 ventilators for the US government under the Defense Production Act for US$336m, media reports said.
Ford, Wayne State University, the Wayne State University Physician Group and ACCESS are launching a new initiative, which will improve access to Covid-19 testing for symptomatic first responders, health care workers and corrections officers in Michigan.
Porsche first quarter sales dipped only 5% to 53,125 cars worldwide in the first quarter of 2019. China remained its biggest market and most dealers there have reopened.
Passenger car sales in the European Union (EU) in March – the UK no longer included – plunged 55.1% year on year as a result of the COVID-19 outbreak, the European Automobile Manufacturers Association (ACEA) said.
Chinese self-driving technology company Pony.ai said it was set to launch an autonomous goods delivery service to residents in the Californian city of Irvine to help meet demand for online orders due to the COVID19 coronavirus lockdown.
The nascent sharing economy will have to work out how to ramp up its hygiene practices in a post-COVID world. We summarise key developments and actors in what looks like will be a growing area of interest.
PSA has outlined an extension of services available on Groupe Webstores, including financing offers as the automaker deals with the coronavirus pandemic.
Veoneer is to hold its 2020 Annual Meeting of Stockholders in virtual only format.
Porsche SE has withdrawn its forecast for the group after tax results for 2020. Volkswagen AG had already said it had withdrawn its outlook due to the impact of the Covid-19 pandemic.
As Europe is grappling with the health, social and economic impacts of COVID-19, the European Automobile Manufacturers’ Association (ACEA) has set out four guiding principles for a successful re-launch of the auto industry, which, it said, would be vital to the wider economic recovery of the continent.
Goodyear Tire said first quarter results were significantly affected by COVID-19 with volume down 18% versus last year. It has temporarily suspended its quarterly dividend and reduced 2020 capital expenditure to further enhance liquidity.
Hyundai Motor India recently announced it has expanded the coverage of its online sales platform ‘Click to Buy’ to pan-India level. The move highlights a shift towards digital sales in India, a trend that will likely outlive the coronavirus crisis, analysts say.
Slovenian car parts manufacturer Cimos intends to restart production at its domestic sites at the end of April and the beginning of May, local media reported.
Twelve Ford workers are experimenting with wearable social distancing devices that could be deployed more widely once the carmaker reopens idled manufacturing plants, a media report said.
Concurrent with separately announced plans to restart passenger car production “step by step”, Volkswagen commercial vehicle plants in Hannover, Germany, and Poznan and Wrzesnia in Poland are to gradually start production again at reduced capacity levels from Monday 27 April after a shutdown of what will by then be just over five weeks.
Honda Motor said it would extend a shutdown of its Mexican plants through 30 April and plans to furlough most US salaried workers for two weeks as a result of the coronavirus pandemic.
Volkswagen has detailed a “step by step” resumption of passenger car production starting with Zwickau and Bratislava from 20 April and other German, Portugal, Spain, Russia, South Africa, North and South America plants from 27 April.
AD Plastik has resumed manufacture at its Russian plants for Avtovaz after being designated a “producer of special national importance.”
Faurecia has strengthened its liquidity by EUR800m (US$870m) to face any potential scenario related to the Covid-19 crisis.
Johnson Matthey is helping to provide increased numbers of ventilator components in Europe through its customer, Hoerbiger Flow Control in the light of the coronavirus crisis.
Volkswagen and IG Metall have agreed the pay agreement, which had been due to end on 30 April, 2020, should remain in force until the end of December 2020 without increases in the pay scales.
Hyundai Motor America is expanding support for COVID-19 drive-thru testing to 22 hospitals across the US with US$4m in grants through its Hope On Wheels programme.
General Motors has begun mass production of the Ventec Life Systems V+Pro critical care ventilator under contract to the US Department of Health and Human Services and expects to ship the first 600 or so this month.
Michelin Romania, part of French tyre manufacturer Michelin Group, said it had gradually resumed production at its metallic cord factory in Zalau.
Three automakers in Japan plan to put up to 20,000 workers on temporary leave due to ongoing production cuts, according to local reports, as global vehicle demand continues to be decimated by the coronavirus pandemic. The three companies, Nissan, Mitsubishi and Mazda, have already asked some of their staff to take paid leave.
Kia Motors said it was planning to suspend production at three of its nine vehicle assembly plants in South Korea later this month due to the sharp fall in global vehicle demand caused by the COVID19 coronavirus.
Valeo has unveiled EUR1bn (US$1.1bn) in additional credit lines with its main banking partners, adding its 2020 financial obejctives in connection with its 2019 full-year results are no longer valid.
Interior fittings supplier, Wrapping Solutions is partnering with Optima in the current pandemic crisis to produce up to 24,000 facemasks per day in a two-shift operation in Germany.
Responsible for 4.5% of Brazil‘s GNP, the auto industry is one of the economy’s most vulnerable sectors in this Covid-19 epidemic. There were two very distinct halves to March. Following the two first weeks of healthy activity in the domestic market and robust, 9% growth for the year, the steady slowdown of retail trade and auto factories in the second half cut almost 90% of the sector’s activity.
Bridgestone EMIA said several plants across its manufacturing network would slowly ramp up production in response to business and customer needs.
Autoliv, the vehicle safety systems supplier, has changed its annual stockholder meeting to a virtual gathering.
Renault is to focus on LCV and electric vehicles in China in a preliminary agreement with Dongfeng Motor through which the manufacturer will transfer its shares to Dongfeng.
SsangYong Motor has confirmed its Indian parent Mahindra & Mahindra Ltd will inject KRW40bn (US$33m) to help it stay afloat, as the company continues to struggle under the impact of the global COVID19 coronavirus pandemic.
New vehicle sales in Vietnam plunged by almost 40% to 18,270 units in March 2020 from 30,199 units in the same month of last year, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA). Consumer and business activity in March was disrupted by local lockdowns and international travel restrictions as the government sought to slow the spread of the COVID19 coronavirus.
New vehicle sales in China fell by over 43% to 1.43m units in March 2020 from 2.52m units in the same month of last year, according to wholesale data released by the China Association of Automobile Manufacturers (CAAM). Last month’s sales were 4.6 times higher compared with the February 2020 total, the low point of the crisis when many parts of the country were under lockdown. February sales plunged by almost 80% year on year to a decades low of 310,000 units.
Ford has said it expects to post a $600m first quarter loss as stalled vehicle sales around the world hit its financial performance. The company has also taken steps to build up its cash reserves to address the unprecedented industry crisis caused by the COVID-19 coronavirus.
Lear says it is taking new measures to address industry conditions created by the Covid-19 pandemic.
General Motors is increasing production capacity for facemasks at its Warren, Michigan facility due to the “overwhelming number of requests.”
Ford, in a US regulatory filing said it expects a Q1 net loss of US$2bn. In an earlier filing dated 13 April, it announced certain some first quarter 2020 financial results but was unable to include its expected net income/(loss) for the quarter because it had not yet calculated its preliminary tax expense.
Ford, with design and testing consultation from 3M, has developed a new powered air-purifying respirator (PAPR). It is also working with other companies on COVID-19-related protective and test equipment.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
“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.
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.
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.
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.
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.
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.
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).
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.
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.