In the wake of an unthinkable crisis, the COVID-19 Coronavirus outbreak, many businesses are shuttering their doors temporarily - with many now, unfortunately, closing down entirely. It's a systemic shock to the economy and the automotive industry is certainly feeling the pain.
Automotive manufactures are both scrambling to find parts, secure inventory, and also balance the closure of some plants as we go into quarantine. Luckily, Motor City is still able to source and ship parts - from rain guards to floor mats, oils, additives, or more. Not many businesses are fortunate enough to be digitally prepared to manage business remotely.
See the snippet below from a CNBC article:
Automakers are scrambling to find parts and prevent shortages in their supply chains as the spread of the coronavirus rattles markets and threatens to roil manufacturing processes globally.
General Motors identified a potential parts shortage and airlifted supplies for its North American truck production, according to United Auto Workers officials. A company spokesman declined to comment on specifics, but confirmed the plants producing the vehicles are operating normally. Fiat Chrysler has said it is seeking alternative suppliers. Others like Toyota Motor and auto suppliers Dana and Aptiv have established teams, task forces and war rooms to closely monitor the COVID-19 epidemic.
“Everyone right now is working hard and scrambling to figure out optionality and assessing the risk on which parts are at highest risk,” said Razat Gaurav, CEO of supply chain analytics firm Llamasoft.
Moody’s Investor Service cut its global vehicle sales forecast earlier this week to be down 2.5% in 2020 instead of a 0.9% drop due to the coronavirus.
The virus already has taken its toll on automotive stocks. Both GM and Ford Motor shares are down double digits this year, including roughly 12% declines since last week. Even shares of Tesla, which are up 59.7% this year, have fallen 25.9% since Feb. 21.
The World Health Organization declared COVID-19 a global health emergency last month. The virus has spread substantially beyond China and is now confirmed in at least 37 countries. There are more than 85,000 confirmed cases, including at least 2,933 deaths. It also has caused financial markets globally to plummet this week, including the Dow falling more than 12% — its biggest weekly percentage loss since 2008. The S&P 500 declined 11.5% and the Nasdaq dropped 10.5% this week.