The global industry pressed the ‘pause button’ says the China Association of Automobile Manufacturers latest report. The global auto industry pressed the ‘pause button’, according to a report by the China Association of Automobile Manufacturers (CAAM). The COVID-19 pandemic has forced carmakers across the globe to halt production. These production suspensions have caused huge losses to the global auto sector, according to CAAM.
American car manufacturers like General Motors, Ford Motors, Fiat Chrysler have all announced a closure of factories in the US, Canada and Mexico following which automakers like Honda, Hyundai shut their operations in North America.
Globally, automobile sales are forecast to drop by 18pc to 73.3mn units in 2020 from a year ago, if the lockdown is extended, according to IHS Markit. The US vehicle sales are expected to decline by 26pc to 12.6mn units, down by 17pc in Europe to 17.1mn units; and down by 14pc in China to 21.8 million units.
China-based automakers have resumed operations but the outlook for the auto sector is negative. There are many difficulties that the auto sector is facing, specifically, from the demand side leading to high inventories with automakers.
In February, China’s recorded one of its worst monthly car sales of 310,000units, a decline of 79.1pc from the year prior. The epidemic has deteriorated the Chinese auto market that was already going through a 20 month period of low demand. To push demand, China has introduced various measures. Chinese cities including Foshan, Guangzhou, Zhuhai, and Changsha have introduced schemes to subsidise car purchases and relax restrictions on car sales.