The Novel Coronavirus (COVID-19), which originated in Wuhan, China in end-December 2019, is fast spreading its tentacles across the world and is having a major impact on all aspects of society, including the automotive industry. All through January and February, automakers and their suppliers have been scrambling to keep vehicle assembly lines humming but March has seen the industry take concerted action, in sync with government advisories, to keep its personnel safe.
With the World Health Organisation declaring the COVID-19 outbreak a pandemic, an unprecedented global disruption is at hand. Automobile and component manufacturing plants are being shuttered around the world, consumer footfalls in showrooms have fallen sharply, vehicle sales are dropping dramatically and almost every major industry event is either being cancelled or going the digital way. All of March has been packed with coronavirus-related news and it all started with the cancellation of the 2020 Geneva Motor Show, which was to open on March 5.
Manufacturing units around the world have been shut down, footfall in showrooms have fallen sharply, and vehicle sales have taken a huge hit. For already struggling automotive industry, the global economic trade impact of COVID-19 pandemic on automotive industry is estimated to be around $ 5.7 billion with European Union the worst-hit region at $2.5 billion decline in automotive industry due to disruption in automotive supply chain amid reduction in supplies from China. Major automotive events across the globe are either being cancelled or postponed, notably 2020 Geneva motor show, Qatar Grand Prix, New York International Auto Show, and Australian Grand Prix. Major automotive players such as Fiat Chrysler Automobiles, Ford, PSA Group, Volkswagen Group factories in Europe, Ducati, Tesla factory in California, BMW group European factories, Rolls-Royce, General Motors are among the global automotive manufacturers who have suspended their production due to Coronavirus (COVID-19) pandemic.
The Coronavirus’ Impact On The Global Automotive Supply Chain:
manufacturing industry is in the midst of an evolution. New consumer needs, advancing technology – AI and automation – and an uncertain trade environment are just a few of the factor’s companies have been grappling with over the past few years. In 2020, the situation for manufacturers has become even more challenging with the COVID-19 outbreak, which is affecting supply chains and disrupting manufacturing operations around the world.
The most vulnerable companies are those that rely heavily or solely on factories in China for parts and materials. Many of these companies have been forced to source production in this region due to increased pressure to reduce supply chain costs through offshoring and outsourcing. With these cost-cutting measures, a disruption in the supply chain results in a quick stop to manufacturing due to a lack of parts.
Here is a list of automotive companies which face the impacts on their supply chain:-
Fiat Chrysler Automobiles:
Fiat Chrysler said it plans to halt operations at its factory in Serbia due to a lack of parts from China because of the coronavirus.
MTA S.p.A. Advanced Automobile Solutions:
The Italian manufacturer MTA, which makes electrical parts for cars, has been forced to close its factory in Codogno after the Covid-19 outbreak in northern Italy. It said the closure would have a knock-on effect on production at Fiat Chrysler’s plants in the country before spreading to other carmakers across Europe.Dongfeng Motor Corporation:
Dongfeng Motor, China’s second-largest carmaker based in Wuhan, will post lower profits as a result of the extended production break arising from the deadly coronavirus outbreak as analysts say.Renault Group:
Renault has extended the suspension of its industrial activities in China into March because of the effects of the coronavirus outbreak. Renault's factory in Wuhan, which it operates with Dongfeng in a joint venture, will be closed until March 10.PSA Group:
PSA's joint venture with Dongfeng Motor, called DPCA, has two assembly plants in China, in Wuhan and Chengdu. The plants produce Peugeot and Citroen models for the Chinese and other Asian markets. It also makes engines and transmissions at a factory in Xiangyang, some of which it exports to Europe. PSA has extended the suspension of its industrial activities in China into March because of the effects of the coronavirus outbreak.Nissan Motor Co., Ltd:
Nissan Motor Co said it would keep its plants in Xianyang, Hubei Province, and Zhengzhou, Henan Province, shuttered after Feb. 24, when it had planned to resume operations. It did not give a new date for reopening.Honda Motor Co., Inc:
Honda Motor Co will temporarily cut back production in Japan due to difficulty in sourcing parts from China amid the coronavirus outbreak. The cutbacks, which will last for a few days beginning early March, will see a reduction in output by a few hundred vehicles at two plants in Saitama Prefecture. Japan’s third-largest automaker has seen its profitability declined by more than half in the past two years, led by a series of quality-related issues.Toyota Motors:
Toyota Motor Corp. on Wednesday said that operations at its plants in Japan may be affected by supply chain issues linked to the new coronavirus outbreak in the coming weeks, as the global outbreak gathers pace.Aptiv PLC:
Automotive technology supplier Aptiv PLC said the coronavirus outbreak in China has hurt revenue by $150 million to $200 million and operating income by $60 million to $80 million.Hyundai Motors:
Hyundai Motor Company has shut down one of its car factories in South Korea after it was revealed an employee had contracted the novel coronavirus. The company has started disinfection procedures in areas where the employee worked and quarantined five co-workers who made close contact with the infected employee.
Mahindraan Mahindra:
M&M has reported a 42 percent decline in total sales at 32,476 units in February.MG Motor India:
MG Motor India too reported lower retail sales of 1,376 units in February, hit by component supply constraints from China and other locations.TATA Motors:
TATA Motors said that vehicle production is affected due to the Coronavirus outbreak in China.Tesla, Inc:
Tesla has shed 25% at the end of February due to coronavirus outbreak weighs on the broader market.There could be further pain ahead of China's struggling automotive industry and Tesla, which had to shut its Shanghai Gigafactory in early February due to the virus outbreak.
Mitsubishi Motors Corp:
Mitsubishi Motors has postponed the restart of its factory with Guangzhou Automobile Group in Hunan province until 27 of February due to the coronavirus outbreak.KIA Motors:
Kia, which manufactures several vehicles on similar platforms as Hyundai vehicles, has had to cut down production at its plants in Korea while suspending work in China.Vauxhall:
Coronavirus impact began to appear at Vauxhall as Two workers at Luton's Vauxhall plant have been restricted from coming into work following a weekend trip to Italy as a precaution against possible Coronavirus contamination.General Motors Corporation:
General Motors has a big presence in China through several joint ventures with local companies. A GM spokesperson told Car and Driver that it restarted production at some plants in China on February 15, but its plants in Hubei province, the epicenter of the coronavirus, will be kept closed until at least March 10. Even with all these closures, GM says it expects the coronavirus will have "no impact" on its production plants in the U.S.
Magna International Inc:
Most of Magna International’s plants in China have resumed operations, albeit, at reduced capacity, CEO Don Walker told reporters following the company’s investor conference on Thursday. Magna has 54 manufacturing plants located in China employing 18,750 people. Walker said there are still “a couple” plants down in Wuhan, the city at the center of the coronavirus outbreak. The factories that are back up and running are operating at between 50 to 80 percent capacity.Valeo:
Valeo, the French supplier, is an automotive supplier and partner to automakers worldwide. has three sites in the Wuhan area. Valeo says it has not suffered any operational impact from the outbreak of the coronavirus in Wuhan, although it continues to follow the situation closely while shutting for Chinese New Year.BMW AG:
Around 150 employees of BMW in Munich have been ordered to ‘self-quarantine’ after a worker in the carmaker’s research and development center tested positive for the Covid-19 coronavirus strain.Bosch:
Also, the top manufacturers of automotive ICs have been hit by coronavirus like Bosch “the world’s biggest auto components supplier” as its chief executive warned that coronavirus could impact its global supply chain, which is heavily dependent on China.Foxconn:
Foxconn, the world’s largest electronics contract manufacturer, is China’s largest private sector employer. It assembles the iPhone and a broad range of other consumer electronics gadgets, but also makes a range of electronics components and has diversified into manufacturing services ranging from auto electronics to medical devices to industrial robots.
CoronavirusOutbr Is Massively Disrupting The Indian Automotive Industry:-
There has been a spurt of electric vehicles development activity post the FAME-II scheme. 2W OEMs have launched premium scooters (Ather 450x, Bajaj Chetak, TVS i-Qube), passenger car OEMs have launched high end products and electric buses are being promoted by Chinese and domestic OEMs. Mass adoption of EVs is expected only in the medium term though.
As EV technology evolves and ride sharing services make inroads into tier-II cities, the growth rates for 2-wheelers will be impacted over the medium term. Industry growth has already moderated to 6-8% (versus double digit growth earlier) as penetration levels have exceeded 50% of households in India. We believe that as the second vehicle usage in households get cannibalised, industry growth rates are likely to moderate to sub 5% levels.
Passenger cars will adopt alternate technologies such as hybrids on the winding road to electrification, while commercial vehicles (passenger buses) are early adopters of EV technology, led by state incentives under the FAME-II scheme. Limited charging infrastructure and elevated product prices is a key constraint though.
This is dummy text. It is not meant to be read. Accordingly, it is difficult to figure out when to end it. But then, this is dummy text. It is not meant to be read. Period.
1 Comments:
Click here for CommentsNice
ConversionConversion EmoticonEmoticon