Worldwide vehicle production “down 20%” in 2020
Global vehicle production was supposed to hit 89 million units in 2020. The corona crisis and the recession that is likely to follow could shave off 20%, leading to a total of just 71 million.
That steep decline, far greater than anticipated earlier this year, likely will cost global automakers 19 million units in lost production in 2020, according to LMC Automotive, an auto industry analyst.
• In North America, production remains shuttered at least through April. OEMs have had to delay the launch of the Tesla Model Y and the Ford Mustang Mach E, among many other models.
• China, on the other hand, has already restarted most of its automotive production. The country expects to limit the decline in new-vehicle sales for 2020 to 12%.
• Vehicle sales in both Europe and North America are predicted to bottom outin April, but LMC predicts a slower recovery than in China.
• Other regions are also likely to be affected deeply by the pandemic and the ensuing recession.
LMC foresees an upturn in automotive sales from the end of the year, but warns of darker times ahead – the company says that its prediction of -20% production (18 million vehicles produced less) may turn out to be too optimistic, and may have to be revised further down.
Authored by: Frank Jacobs
COVID-19: Carmakers get ready to resume production in Europe
OEMs with plants in Eastern Europe kick off, French sites likely to be last. It’s not a coordinated effort, though.
A month ago, most OEMs began shutting down their European plants. The initial reason was that parts supply from China was interrupted, but as soon as the pan-European impact of the virus started materialising, closing their entire industrial footprint was unavoidable with worker safety and containment measures becoming top priorities.
Now that COVID-19 seems to have reached its peak in many European countries, governments are starting to relax some of the lock-down measures. OEMs are allowed to resume production on the condition that sufficient safety measures are in place, such as keeping workers at a safe distance from one-another, providing masks, performing health checks, hourly disinfection, and so on. But there is hardly any coordination.
The European Automobile Manufacturers’ Association (ACEA) today issued a statement that explicitly calls for a EU-wide support for a coordinated re-start of activities and investments right along the supply chain.
“As soon as the immediate crisis ceases, it is vital that both manufacturers and suppliers can rapidly and simultaneously get their plants up and running across the whole supply chain and in all countries. Otherwise it will be impossible to return to full-scale production,” ACEA says.
Today, it’s every man for himself. When carmakers push the start button again, depends on the type of plant and on the country it is based in. Logically, it will mainly be engine, body panel and component manufacturing that resumes, with vehicle assembly plants following later.
Geographically, it is interesting to see that plants in the Czech Republic, Slovakia and Hungary have already gone back to work – or are about to. OEMs with plants there indeed hold an advantage.
Italy won’t start before May 4 unless the government makes an exception for the automotive industry. There are still the unions to be reckoned with, though.
The same goes for France, where PSA and Renault are negotiating with workforce representatives to reopen the factories before May 11, the planned end date of the current lock-down measures.
In Germany, most OEMs are waiting another week before resuming their activities.
State of affairs on April 17
BMW Group won’t be resuming production at any of its European plants before May 4.
FCA wants to start building the Jeep Compass in Melfi first, as well as the new electric Fiat 500 in Turin and the light-commercial vehicles in Atessa.
The Panda and current 500 are built in Tychy, Poland, where the assembly lines won’t start before April 24. The Turkish-built Tipo might start rolling off the belt four days earlier.
Ford has suspended its European production (Germany, UK, Spain, Romania) until at least May 4.
Hyundai is one of the first OEMs to restart its European factory: Nosovice in the Czech Republic resumed production of the Kona and i30 on April 14.
JLR mainly builds cars in the UK, where production could recommence in the course of next week. It’s brand new plant in Slovakia, which builds the Land Rover Discovery and the new Defender. The Jaguar I-Pace and E-Pace are made by Magna Steyr in Austria, which today stated that May 18 is the target date.
Kia has resumed its production in Slovakia, where the Ceed, Proceed, XCeed and Sportage are built.
Mercedes-Benz has earmarked April 20 as the date to start some of its German factories, mainly to build up stock for car production. The brand’s Hungarian plant in Kecskemet, which builds the A, B, CLA and GLA Class, is scheduled to reopen on April 22.
Nissan has not decided when it will reopen its plant in Barcelona. Its British factory might start building Qashqais, Jukes and Leafs again by the end of this month.
PSA is currently in talks with the unions to resume production of Peugeot, Citroen and DS vehicles in France. The Opel factories in Germany (Insignia) and Poland (Astra) as well as the Vauxhall plants in the UK remain closed.
On April 13, PSA allegedly resumed its Slovakian manufacturing operations – which is good news for the Peugeot e-208. PSA’s Spanish plants in Zaragoza and Vigo, where the Opel Corsa/Corsa-e, Opel Crossland X, Citroën C3 Aircross and Peugeot 2008 are built, remain closed for now.
Renault has halted its production all over France until further notice. Its Portuguese site has reportedly resumed part of its operations, just like the group’s Russian plant.
Renault subsidiary Dacia says it is gradually restarting its component and stamping activities as from April 21. Assembly won’t resume before May 4.
Toyota will first start producing the Yaris again, at its plant in Valenciennes, France, on April 21, followed by its engine and drivetrain factories in Poland. The plants in the UK (Corolla) and Turkey (C-HR) will have to wait until May 4.
Volvo has resumed body components production in Olofstrom, Sweden, to first supply its Chinese factories, which started last week, and then the brand’s main European vehicle production plant in Torslanda. Next Monday, the powertrain plant in Skovde and the XC40/V60 plant in Belgium will also get the green light.
VW Group’s imminent production restart will focus on its Zwickau electric-car plant (VW eGolf and ID3) in Germany and its Slovakian factory in Bratislava, where the OEM’s large SUVs and the A-segment models are built.
Other factories in Germany as well as plants in Portugal, Spain and Russia will be gradually awoken from April 27. Audi resumed production of engines in Hungary on April 14 to build up supplies for its European car plants. It plans to restart production at its factories in Neckarsulm, Germany (from A4 to A8) and Brussels, Belgium (E-Tron) on 20 April. (www.fleeteurope.com)
Authored by: Dieter Quartier
How to keep afloat in wake of COVID-19, Latin America
As the new Coronavirus (COVID-19) pandemic worsens in Latin America, automobile and mobility companies throughout the region need to seek ways to maintain business activity as much as possible all while holding health and safety to its highest extent.
One benefit the region does have is that the pandemic hit other parts of the world first. This has given Latin America a preview of what to expect and a chance to prepare accordingly. Don’t repeat the errors taking place in other countries. Among other things, this means abiding by physical distancing measures and maintaining transparent lines of communcation within your company and with your clients.
While many companies have been economically impacted by quarantine periods mandated by governments to help reduce the contagion of the virus, some have found ways to stay afloat during the crisis.
One way to do this is to recognize the changing demands of today and to prepare for the needs of the near future. With that said, among the mobility demands on the rise today are the need for emergency vehicles as well as last-mile delivery services, the latter primarily being for food and pharmaceutical products.
While automaker production and sales are currently down, emergency vehicles are in higher demand in the wake of COVID-19. In Brazil, local automobile rental and leasing company Unidas closed a 27 million-real deal to purchase Brazilian fleet management firm Zetta Frotas in early April.
The acquisition is part of Unidas’ plan to develop a fleet of specialized vehicles such as ambulances, rescue and police vehicles, as well as ICU support units and funeral cars.
Meanwhile, last-mile delivery companies Rappi (Spain) and iFood (Brazil) are battling it outin Colombia where both have teamed up with local companies. While Softbank-backed Rappi has teamed up with Kiwibot, Prosus-backed iFood has teamed up with Domicilios.com.
Although Rappi leads market share in Colombia, the 51% purchase of Domicilios.com (owned by Delivery Hero) by iFood puts the Brazilian company in a good position, now with a network of 12,000 restaurants in 30-plus cities.
One way to combat COVID-19 contagion is to provide no-touch service, meaning that there is no person-to-person contact during deliveries and that only electronic payments are accepted. While iFood is currently eying robot and drone delivery, Rappi has already started it in Colombia.
The Spanish company is currently carrying out a pilot program until 8 July which entails a fleet of 15 four-wheel bots delivering food in the El Poblado neighborhood of Medellín. Currently, approximately 120 deliveries are accomplished per day.
Rappi delivery bots roam the streets of Medellín (source: Rappi)
These deliveries not only help to keep up with the high demand in Medellín but they are also more hygienic, the company says, highlighting that the bots are disinfected before and after each delivery.
As we can see, these are just a few examples of how companies can get through this unfortunate crisis. Although it will be difficult, with ingenuity, discipline, and patience, staying afloat can be achieved. Good luck to all! (www.globalfleet.com)
Authored by: Daniel Bland