Forget about a lack of toilet paper down at your local supermarket – there might be bigger problems in store for fleets everywhere.
COVID-19, also known as the Coronavirus, has certainly made its presence felt globally with authorities quick to contain the outbreak of contagious infection. But as the looming fear of a mass outbreak takes hold, it could be the automotive sector that will take the hardest hit.
The Geneva International Motor Show, one of the most prestigious automotive exhibitions across the globe has already been cancelled. Mercedes-Benz has followed by scrapping its GLA drive launch day, with many manufacturers set to follow suit. Without these drives, buyers will continue to be starved for opportunities to increase their knowledge about the latest products. But come to think of it what products will we even have to display if things don’t pick up soon?
The extended factory shutdown in China is already costing automakers big time as the government grapples with the worsening coronavirus outbreak. Automotive research firm IHS Markit forecasts automakers will lose about 1.7 million units of vehicle production in the first quarter as local Chinese governments keep plants closed to keep the new virus from spreading.
Michael Dunne, CEO of ZoZoGo, which advises automakers doing business in China, described the coronavirus as “unprecedented in so many ways.”
Dunne said the last time China had any issue of this size was the SARS outbreak; however, that was nearly 20 years ago and the country didn’t have the global impact it does today on the automotive industry.
China’s auto factories produced 1.1 million passenger vehicles in 2002 when the SARS epidemic erupted, killing 349 people in China from 2002 to 2003, according to International Organization of Motor Vehicle Manufacturers. That compares with roughly 23.5 million vehicles produced today, according to the group.
“That’s 2 million vehicles a month; 500,000 a week. So, you miss a couple weeks and that’s a million units right there,” Dunne said.
