Earlier this week, the World Health Organization (WHO) declared the novel coronavirus COVID-19 outbreak to be a pandemic, with a steady stream of new cases being reported worldwide. Now, with the virus confirmed in Michigan, the heart of the U.S. auto industry, experts have begun to speculate how it could impact the industry moving forward.
A recent report from Reuters indicates that while the spread of the novel coronavirus COVID-19 has resulted in fears of a slowdown in U.S. auto sales, automotive production remains steady, with officials from the Big Three (General Motors, Ford Motor Co., Fiat Chrysler Automobiles) indicating no disruption in stateside production.
So far, automakers have circumvented supply chain disruptions by finding parts from alternative sources and through air shipments. Last week, GM CEO Mary Barra said that the automaker’s production would be secure from parts shortages “quite far into this month.”
Regardless, COVID-19 has already had a deep impact on automakers, with auto stocks falling sharply this week. What’s more, analysts have downgraded global auto sales forecasts in the wake of the novel coronavirus pandemic, with Moody’s indicating a 2.5-percent decline, a drop of 1.6-percent from the original forecast of a 0.9-percent decline.
Once available parts supplies begin to run dry by the end of the month, the effects of the supply chain disruptions are expected to manifest. Demand is also expected to be affected following potential impacts to consumer confidence.
Some automakers are preparing to limit the spread of the novel coronavirus by having employees work from home, implementing travel restrictions, and increasing access to sanitation products. Others are also implementing new visitor protocols to help limit exposure.
Current statistics show more than 124,000 cases of novel coronavirus COVID-19 globally, with more than 4,500 deaths. In the U.S., there have been more than 1,000 cases of COVID-19 reported and more than 30 deaths. Both figures are expected to rise substantially in the coming weeks.