The shutdowns and deteriorating demand in the automotive sector have caused GlobalData to revise its North American and European light vehicle (LV) production forecasts for 2020 and beyond. This is a stark illustration of how serious the COVID-19 crisis, which has caused sales to whither and shuttered manufacturing plants, is becoming for the automotive industry, says GlobalData, a leading data and analytics company.
For North America, the GlobalData base LV production forecast now stands at 13.6 million, down 2.9 million from the previous forecast. In Europe, the forecast now stands at 16.7 million, which is down 15.7% from the previous forecast
David Legget, Automotive Analyst at GlobalData, comments: “The drop in North American vehicle production forecast for 2020 versus last year is approaching 20%. That is a very big adjustment for an industry that relies on volume throughout the supply-chain. Already thin margins will be squeezed further by reduced order volumes and some companies will inevitably struggle with cash-flow to weather what is turning out to be a very sharp demand downturn.”
GlobalData’s base COVID-19 scenario forecasts a fall in global LV sales of 17.2% on 2019 to 74.3 million with declines heavily weighted to Q2 and recovery underway thereafter.
Leggett concludes: “One immediate consequence of the deepening crisis is that vehicle manufacturers and suppliers are looking to build cash reserves and expand credit lines to get them through it. The banks will be busy for a few weeks yet.”
ENDS
For more information
To gain access to our latest press releases: GlobalData Media Centre
About GlobalData
4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.
