Since mid-March, the COVID-19 epidemic has started to make the European and American auto industry nervous.
According to incomplete statistics of routing agencies, as of March 25th, 12 overseas automobile companies including GM, Ford, Volkswagen, Fiat Chrysler Group (FCA) and PSA have closed or planned to close more than 100 factories. Even the strongman Musk, who thinks that "panic about COVID-19 is stupid", had to announce on 23rd that Tesla would close some American factories.
In fact, this "black swan incident" triggered by the epidemic has evolved into a "grey rhinoceros" in the global automobile industry, which not only made 90-year-old Buffett experience four consecutive US stock market crashes, but also reminded people of the huge impact of the 2008 financial crisis on the automobile industry.
Then, under the impact of the epidemic, what difficulties have foreign automobile manufacturers encountered? How did they handle it? Where will the automobile industry go in 2020?
Global car companies enter production standby mode.
When the COVID-19 epidemic swept across the United States, Detroit's three major automakers planned to temporarily close all American factories from mid-March.
Ford Motor Company said that it plans to close factories in the United States, Canada and Mexico before March 30, and will work closely with the United Auto Workers' Union (UAW) to restart factories in the next few weeks to try its best to stop the spread of the virus. ?
"We will continue to work closely with union leaders, especially UAW, to find ways to protect the health and safety of employees, and we are looking for solutions to meet the delivery of orders," said Kumar, president of Ford North America. Galveston Hotra said.
On March 23rd, Ford said that its operations in Europe, India, Vietnam, Thailand and South Africa would be closed for at least a few weeks. Mark, President of Ford International Market Group? Ovenden said in a statement: "The health and safety of employees, distributors, customers, partners and communities is our top priority."
GM said that it will close all North American factories by March 30th at the latest, and then it will evaluate whether to resume work once a week. ? Mary Bora, Chairman and CEO of General Motors (Mary? Barra) said: "We have agreed to stop production in a systematic and orderly manner to help fight novel coronavirus."
"By the end of March, the company will gradually stop production in factories all over North America." Fiat Chrysler said that it will reassess the situation at the end of this phase of the factory closure measures and will work closely with UAW to create safe working conditions, including setting shift hours and strengthening cleaning procedures. ?
The data shows that the factory closure measures of American automobile companies will affect 25 assembly plants and 6.5438+0.5 million union workers. Among them, GM has 1 1 factories, followed by Ford's 8 factories and Fiat Chrysler's 6 factories. ?
In addition, due to the expected decline in market demand, Honda North America announced that it would close four American factories from March 23rd. Honda said in a statement that it will stop production for six days and plans to resume production before the end of the month. Volkswagen confirmed that employees in Chattanoou, Tennessee, have received a week's paid vacation.
Tesla, who had been tough in the face of the epidemic and even ignored the suggestions of local governments, also issued a statement on March 23, closing some factories. "We decided to temporarily stop the production of the fremont factory from March 23rd, while the production, delivery and after-sales service of the super factory in Nevada will proceed normally."
At the same time, as the spread of COVID-19 in Europe accelerated, European automakers began to close their local manufacturing plants.
PSA, a French carmaker, said it had stopped production at more than a dozen European factories, including those in France, Germany, Portugal, Britain, Slovakia and Spain. Fiat Chrysler also announced that it would stop production in most of its European factories, including those in Italy, Serbia and Poland. It is unclear how many of FCA's 23 factories will continue to operate.
It is worth noting that the above two companies are still in the process of merger.
"Despite the interruption of market demand, the company is still cooperating with its supply bases and business partners so that our manufacturing business can return to the previously planned production level as soon as possible." ? FCA said in a press release that it plans to take some measures to restart the manufacturing business "immediately" once it is ready.
On March 15, Ferrari announced that it would temporarily stop production at its factories in Maranello and Modena, Italy. Its current plan is to resume production on March 27th.
Ferrari also pointed out that because it is experiencing "the first serious supply chain problem, it is no longer allowed to continue production". ? Moreover, Ferrari has also suspended its business activities. At the same time, before the production was stopped, Ferrari had announced relevant layoffs.
In the British market, Aston Martin said that the company's production suspension plan will last until April 20, but it will continue to assess the situation and "will resume operations as soon as possible."
In addition, Bentley, MINI, Rolls-Royce, Nissan, Jaguar Land Rover, Toyota and Honda all suspended car production in the UK due to the spread of the epidemic.
In the German market, BMW announced that it has started to close its distribution stores and factories, and the factory shutdown plan will last until mid-April, and the output will be adjusted according to demand. ? BMW said in a statement: "Like many other commodities, the demand for cars will be greatly reduced."
Porsche also announced that it would stop production for two weeks from March 2 1 day, which will affect its two factories in Zuwenhausen and Leipzig, Germany.
According to the Wall Street Journal, most of Volkswagen's factories in Europe stopped production last week. "2020 will be a very difficult year. The epidemic has brought us unknown commercial and financial challenges. " Herbert, Chairman of the Management Committee of Audi AG? Edith (Herbert? Diess) said earlier.
Emergency conversion of medical equipment
Worldwide, the automobile industry is producing ventilators and other medical equipment across borders to fight the COVID-19 epidemic.
Last week, the Trump administration said that it would invoke the national defense production law passed during the Korean War and urge industrial manufacturers to produce materials needed to fight the epidemic in an emergency. For the automotive industry, the plan requires automakers to start producing ventilators and any other equipment needed by hospitals.
In this situation, Ford Motor Company announced its cooperation with 3M Company? F- 150 seat cooling system is used to manufacture medical ventilators. At the same time, Ford is also working with GE? Healthcare co-produced a simplified version of GE ventilator. In addition, Ford is still producing masks. Up to now, Ford has provided more than 654.38 million masks for medical staff.
According to The New York Times, General Motors and Ventec? Life? Systems is producing 200,000 emergency ventilators at the General Electronics Manufacturing Plant in Cocomo, Indiana. GM said that 95% of the required parts have been put in place.
Although Tesla did not immediately switch to producing ventilators, Musk said that he bought 65,438+0,255 ventilators from China and donated them to medical staff in Los Angeles. He believes that "the supply of ventilators in China exceeds demand."
On March 24, according to foreign media reports, CEO of Fiat Chrysler (FCA)? Mike Manley (Mike? Manley) said that it will use an automobile factory in China to produce masks with a monthly output of 6,543,800+100,000.
In Britain, British Prime Minister Boris Johnson? Johnson) started a dialogue with Ford, Honda, Rolls-Royce and JCB and other automobile manufacturers and engineering companies on March 16 to discuss whether their production lines can be used to manufacture medical equipment. It is understood that there are only 5,000 ventilators available in British hospitals.
The latest news shows that major British car companies have expressed their willingness to support the production of ventilators that are most needed today. However, according to the Financial Times, the discussion between the government and car companies is whether there is enough production space to accommodate the newly customized medical equipment production line, rather than reusing and transforming the existing production line.
In addition, Herbert Diss, CEO of Volkswagen, said that the company has started to build the production capacity of protective masks in China, and provided the German authorities with temperature measuring equipment, masks, disinfectants and diagnostic equipment.
In Italy, Ferrari and Fiat Chrysler are cooperating with Siare, the country's largest ventilator manufacturer? Engineering negotiation to help increase the output of the ventilator.
Bankruptcy, merger or bargain hunting?
A few days ago, Royal Bank of Canada Capital Markets Corporation (? RBC？ Capital? Markets) predicts that due to the COVID-19 epidemic, global automobile production may decrease by 65,438+06% in 2020, while American automobile sales are expected to decrease by 20%; Meanwhile, so far this year, the retail volume of China, the largest automobile market, has been reduced by half.
There is more than one consulting company with similar views. Morgan Stanley released a report predicting that car sales will drop by 9% in 2020. Analysts wrote that the "demand shocks" caused by the spread of the virus may cause consumers to delay buying new pickup trucks, SUVs and crossover vehicles.
Morgan Stanley predicts that car sales in the United States may drop from 65,438+0,765,438+055,000 in 2065,438+09 to 654,380+055,000. LMC predicts that in 2020, the sales of light vehicles in the United States will drop from 65,438+068,000 to 65,438+065,000.
Christine of the Automotive Research Center in Ann Arbor, Michigan, USA? Dziczek said that in the United States, stopping car sales for a week will bring a huge chain reaction to the economy, and sales will drop sharply.
According to the center's data, every week of car sales is lost, the whole market will lose about 94,400 jobs and 7.3 billion dollars in revenue.
Therefore, due to the decline in automobile demand during the COVID-19 epidemic, the subsequent suspension of production may bring direct cash constraints to automobile manufacturers. ?
In this form, GM said that it would borrow 654.38+06 billion dollars from the existing credit line and double its cash reserve to ensure that GM would maintain its financial flexibility in the uncertain global market.
Mary Bora, CEO of General Motors, said in a statement. "We are actively taking austerity measures to protect cash reserves and taking necessary measures to manage our liquidity and ensure the sustainable development of our business, thus protecting our customers and stakeholders." ?
At the same time, Ford Motor Company also chose to suspend the payment of cash dividends last week and borrowed an additional $654.38+054 billion to make the best use of the credit line.
On the whole, American auto suppliers began to have a relatively stronger sense of risk after experiencing the bankruptcy lessons of the 2008 financial crisis. Therefore, in this relatively minor epidemic crisis, GM and Chrysler are unlikely to go bankrupt, and Ford will not stumble again.
However, at the key node of automobile industry transformation, some heavy-duty vehicles need mass production, and the temporary suspension of sales and the relative contraction of cash flow will impact the transformation plans of many international automobile companies, including American automobile companies.
"If car companies stop working until around April, the capital turnover of small-scale parts companies may deteriorate." An executive of a large auto parts company in Japan said. He recalled the grim situation after the Lehman incident in 2008, when large listed spare parts enterprises entered a state of loss, while some unlisted SMEs had difficulty in cash flow.
It can be imagined that the longer the production is stopped, the greater the pressure on small-scale parts enterprises, and they will be forced to adjust their business strategies, including restructuring. Therefore, due to the shrinking cash flow, the restructuring among small and medium-sized parts enterprises will be more active in 2020.
For China car companies, although the international market is turbulent, the most urgent task at present is to resume work and production, and restore daily order such as sales and services, instead of indulging in the fantasy of "foreign capital retreating and advancing independently".
In February, Honda's sales in China dropped by 85%, Toyota by 70%, Volkswagen by 965,438+0% and GM by 92%. But on the basis of a relatively deeper market, the efficiency of these multinational giants will be faster than that of their own brands.
Moreover, during the epidemic, global car companies learned the ways and means of China car companies to control the epidemic, rather than the unique technology of R&D and manufacturing, so the gap between them has not been substantially narrowed.
From this point of view, people who fantasize about catching up with European and American cars in the epidemic can wash and sleep, and it is more realistic to go out to sea to bargain at an appropriate time.
This article comes from car home, the author of the car manufacturer, and does not represent car home's position.