Covid-19 leaves ‘in a coma’ to the automotive industry


The globalization of the automotive industry the exposed face of the pandemic coronavirusas , while depends upon components manufactured in China, the largest volume of vehicle sales is in the united States and Europe, the regions most affected by the Covid-19.

This 30th of march, nearly all the plants of manufacture of vehicles in north America are unemployed technician, including Mexico.

The main reason is to prevent the spread of the virus among workers, but also due to the lack of components, and to the anticipated strong fall in the sale of motor vehicles the next few months.

The first assignment was in February, when the spread of the virus in Wuhan, China, led to the closure of factories at the centre of automotive components.

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But as the virus was spreading around the world, especially in the united States, automakers were forced to suspend production, at least until mid-April.

Alik Garcia, an analyst of Exchange, estimates that automotive production in Mexico will fall 13% in 2020.

Before the pandemic, the forecasts in terms of vehicle production in the country was a fall of 5% and a reduction of 6% in export, but the coronavirus worsened forecasts.


“The virus puts an additional weight to the negative perspective. Some plants have slowed their production due to lack of components.

“However, the main reason for that is you will see a decrease in the levels of production and export is the low demand for the following months”, he explained.

IHS Markit estimates that the sale of new vehicles in the united States will fall to 15% in 2020, which will affect the automotive production in Mexico, because 80% of what is manufactured in the country is sent to the u.s. market.

The firm also did a survey among suppliers of the industry in Asia, America and Europe, where 39% reported at least one plant where their employees were infected by the Covid-19.

But in addition to infections, 40% of the providers surveyed reported the lack of raw materials or subcomponents to manufacture parts, and another 37% mentioned damage to the logistics chain.

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Worse than 2009

Analysts agree that this crisis is the worst faced by the automotive industry since 2009, when General Motors and Chrysler in bankruptcy and the lack of credit collapsed sales.

“It is a turning point, we had never seen anything of this magnitude. Even if the coronavirus had been content in China, the global impact would have been huge.

“We cannot deny that are lacking supplies, the only one who has said it is clearly a Volkswagen, but on the other hand, for what you continue producing at the same pace if it comes a drop in sales,” said Gerardo San Román general manager of JATO Dynamics.

Sales in the mexican market, IHS Markit projected placement of 1.1 million vehicles, 16% less than in 2019.

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