Written by Yi Shuai
The outbreak of neocoronavirus pneumonia in China is now largely under control, with more imported cases now dominating. And Wuhan, Hubei, the country's hardest-hit area in this outbreak, has been evacuating medical teams from all over the world in batches over the past two days, which does make everyone's heart breathe a little sigh of relief.
Some time ago, we introduced the current situation of various domestic automobile markets together, and today we will turn our attention to overseas markets. After all, the epidemic has now begun to spread greatly in Japan, South Korea, Europe and North America.
Currently, there are more than 220,000 confirmed cases of NCRP worldwide. In Asia, South Korea is the country with the relatively worst outbreak, with the exception of China. The most serious in Europe is Italy, which is also currently the country with the fastest growing number of cases. Italian Prime Minister announced today that the "closed country" measures will continue to be extended.
North America's big three auto giants issued a statement
And in addition to the more serious outbreaks in Europe, North America is also experiencing an outbreak, most seriously in the United States. On March 14, Trump declared a state of emergency across the United States. And as of now, there are more than 9,000 confirmed cases in the United States.
Previously, a neococcal pneumonia test would cost roughly $2,500 in the U.S. But today, Trump signed an emergency bill that will provide free neococcal pneumonia screenings for everyone in the U.S., including the uninsured, and the U.S., which has always taken neococcal pneumonia lightly, finally can't resist.
Of course, the U.S. car companies and those with factories in the U.S. have adjusted accordingly as a result of the outbreak. First up are the Big Three U.S. auto giants Ford, General Motors, and FCA.
This comes after the United Auto Workers (UAW) called for a two-week shutdown of the Big Three Detroit automakers to protect their members from the outbreak of New Crown Pneumonia.
UAW President Rory?Gamble said, "Ford, General Motors and Fiat Chrys have been reluctant to implement a shutdown. They have asked that they be given 48 hours to develop a plan so that they can ensure the safety of workers in their plants. That window will end on the afternoon of March 17, local time."
But for now, the three automakers have agreed to the UAW's request to shut down their North American plants.
In a statement released by Ford, the company said it would stop production at its U.S., Canadian and Mexican plants at the end of the evening shift Thursday until March 30, during which time the facilities would be thoroughly cleaned.
That was followed by a similar statement from General Motors, which said that while the company said the closure would last until at least March 30, its shutdown procedures would vary by plant, and that GM would suspend North American manufacturing operations in an orderly fashion.
And FCA's statement came hours after Ford and GM issued theirs, but essentially said the same thing. It will halt production at its North American plants from March 18 until the end of March.
However, in none of the three statements do we see measures that address how idle workers will be compensated during the closure.
In addition, according to a Reuters report, representatives from Ford and GM are in talks with Trump's administration about how they can help produce medical equipment in response to the new global coronavirus epidemic.
On top of those three automakers, of course, Nissan North America has announced that production at its U.S. plants will be shut down from March 20 through April 6th. Honda's plants in Canada, Mexico and the U.S. will also shut down production for six days, beginning March 23 and ending March 31, and will pay affected workers in full during that time.
Tesla, another U.S. company that has long been on the "cusp," promises its employees they can use their 80 hours of paid vacation time, which is equivalent to two weeks of work. They can also choose to use unpaid vacation time, with the promise that they won't be penalized for doing so.
The impact in North America is not yet fully apparent
In fact, the new Crown Pneumonia is currently the impact of the North American car market is not yet fully apparent, with the current U.S. region of the shutdown, most of them to the end of March end, that is, there is still less than half a month, which is compared to the domestic shutdown time to be much shorter.
If the epidemic does not further deteriorate, the two-week period will not have much impact on production. However, in the current situation, the foreign response time for the new crown pneumonia are half a beat slower, the public for the new crown pneumonia is not very nervous, so the probability of this year's North American market performance will be damaged to a certain extent.
Royal Bank of Canada Capital Markets (RBC?Capital?Markets) data show that the knock-on effect of the new coronavirus pneumonia outbreak on consumer demand could lead to a 16 percent drop in global auto production in 2020, while U.S. auto sales are expected to fall 20 percent.
General Motors and FCA are known to have seen their net profits fall 17.4 percent and 19 percent year-on-year last year, respectively, while Ford's situation is even more dire, with a net profit of $47 million in 2019, well below $3.7 billion in 2018, a drop of 98.7 percent.
If coupled with the shutdown caused by the current epidemic, it will undoubtedly be another blow to the U.S. automakers. At the same time, this may also further affect the global auto market this year, further turbulence and pattern reshaping.
In addition, the fermentation of the new Crown pneumonia epidemic ushered in the U.S. stock market for the fourth time this month meltdown, auto stocks also suffered a heavy blow. March 18, EST intraday, General Motors once fell more than 29%, Tesla fell nearly 18%, Ford fell nearly 17%, FCA fell more than 15%,. As of the close of trading on March 18, U.S. local time, Tesla, General Motors, Ford and FCA shares fell 16.03%, 17.32%, 10.18% and 9.2%, respectively, on the day.
The impact of the overseas epidemic on the domestic market
If you ask me how much the North American epidemic has affected the domestic car market, it may not be too obvious even at the moment, but we can look at the impact of the entire overseas epidemic on the domestic car market, which we summarize as three points.
The first is that the delivery time of imported models in the country as well as the quota will be affected to some extent, especially for those customized models. In this regard, parallel imported cars will face the same problem. Plus the logistics aspect is blocked, so it will be affected to a certain extent during this time.
The second point is in terms of spare parts. As we all know, China's auto parts production can account for more than 50% of the world's auto parts, domestic spare parts factories are in an orderly resumption of work, but with the spread of the epidemic abroad as well as the shutdown of factories, whether it will cause the problem of domestic production capacity backlogs, it really remains to be seen, but it really may also be an impact factor. As of now, if the epidemic can end as soon as possible, this should not happen, but if it continues for a long time, it will be affected to some extent.
The third point is in terms of auto exports, which are mainly affected by the independent brands. Domestic sales fell in February this year, but the export volume is a significant growth trend. However, with the development of the epidemic abroad, the export volume of independent brands will be under tremendous pressure. In addition, they also need to compete with local brands to compete for the market after the epidemic, it can be said that this will have a certain impact on the independent brand.
Epidemic is a big challenge for the industry
Currently, the entire global automotive industry chain is being affected to varying degrees by the new Crown pneumonia epidemic. If the epidemic is not brought under control as soon as possible, it will mean a significant reduction in revenue for many car companies this year.
So, what we have to do now is to hope that all countries can control the epidemic as soon as possible, so as to minimize the loss of enterprises. And for the global car companies, still have to wait for the recovery of the general environment.END
This article comes from the author of the automotive home car family, does not represent the views of the automotive home position.