At this point, it is extremely unlikely that the U.S. car industry won’t feel the impact of this coronavirus outbreak, with Michigan officials recently announcing the state’s first two cases of what is now a global pandemic.
It is now a matter of when, not if U.S. car operations will be affected, seen as how Michigan-based factories account for at least 17% of America’s entire automotive output, reports CNBC.
“I don’t see anybody coming out unscathed,” stated Kristin Dziczek, VP of industry, labor and economics at the Center for Automotive Research. “Everybody’s going to be impacted. It’s to what degree and how much they’ve been able to mitigate the risks since we’ve known about this over the last months.”
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This current crisis is ongoing and its effects were felt across the entire United States in past days, as the Dow dropped 1,400 points on Wednesday after the World Health Organization declared the outbreak a “global pandemic”.
Meanwhile, GM, Ford and Tesla stock have dropped between 17% and 18% since the beginning of the month.
“Right now, we’re in the very early stages, but there are certain pockets in the U.S. that are heavily impacted, and manufacturing will come to a halt if that spreads,” added Dziczek. “New vehicles are a large discretionary purchase that most people can put off if they’re feeling uncertain about the economy, their income and health.”
Lowered expectations
Research firm LMC Automotive has dropped its 2020 global light-duty vehicle sales forecast by 4%, or 3.7 million units due to market uncertainty caused by the outbreak.
“The impact of COVID-19 on the auto industry has gone well beyond the initial focal point of China, resulting in downward forecast revisions across most major markets,” said LMC exec Jonathon Poskitt. “We are still in the early stages of understanding the full impact but expect it to get worse before it gets better.”
