Auto parts supplier Visteon has forecasted global production volumes in the automotive industry will decline on an annual basis by 20-25pc this year, and returning to 2019 levels will take a few years.

 

Prior to COVID-19, worldwide auto sales and planned production, including in China and the US, had been decreasing by 1-5pc. IHS Markit forecasted global light vehicle sales would fall by 22pc to 70.3mn units in 2020 from a year earlier. IHS previously forecasted a 12pc decline this year.

 

At a Deutsche Bank auto industry conference, Sachin Lawand, Visteon’s chief executive officer, said China is rapidly rebounding and almost at pre-pandemic production levels. Over 80pc of the world’s auto supply chain is connected to China. 

 

BorgWarner, also an auto parts supplier and whose North American and European plants have been running for almost a month, flagged volatility in production schedules for OEMs. US auto producers are tracking activities in Mexico closely to ensure limited disruption from the flow of auto components. 

 

In March, an Oliver Wyman forecast model had global car sales in 2020 declining on an annual basis by 17-29pc. China was expected to drop by at least 15pc, while Europe was expected to decrease by 18-36pc, the US by 18-35pc, and the rest of the world by 17-35pc. 

 

The US auto industry has contended with factory shutdowns and disrupted global supply chains since late March. Although factories have resumed activities, recovery from the pandemic is anticipated to be slow. According IHS, the US is expected to recover to Q4 2019 levels by Q2 2022.

 

In December, the US National Automobile Dealers Association forecasted light vehicle sales in 2020 would decline by 1.2pc to 16.8mn from the previous year’s sales volume. ALG, a subsidiary of TrueCar, updated its 2020 US sales forecast in March to 11.2-15.3mn units sold in the US, with an average estimate of 13.2mn units, which is a 22pc decline from 17mn units sold in 2019.

 

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