Amidst the global economic downturn and the China-US trade war, the global automotive industry is looming more than ever before. While the industry has not recovered from these factors, it has hit hard by the recent outbreak of the COVID-19 epidemic across the globe. Economies across the globe are experiencing a perilous trade impact on the automotive sector following the spread of COVID-19. It is estimated that European Union, Japan, US, UK, and South Korea have experienced an automotive trade impact of around $2.5 billion, $950 million, $840 million, $650 million, and $570 million respectively during February 2020. The sales and production of vehicles are estimated to decline in the first quarter of 2020 due to plant shutdowns, disruptions in supply chain and quarantined workforces.
Moguls such as Hyundai, Volkswagen, and many others have put a hold on their production unit as the pandemic spreads globally. In February 2020, Hyundai Motor Ulsan plant put a break on its production after its one of the employees tested positive for coronavirus. The Ulsan plant of the company is responsible for manufacturing the GV80, Palisade, Santa Fe and Tucson. Moreover, the plant has an annual production capacity of around 1.4 million vehicles, accounting for around 30% of the overall Hyundai’s global production. Recently in March 2020, Volkswagen AG announced that it will suspend its production from 19th March 2020 for two weeks. Moreover, automotive maker giants such as Toyota and Tesla have suspended their production as the dearth of automotive components, which are majorly exported by China, continues.
China, an epicenter of COVID-19, has been hard hit by this outbreak of coronavirus in December 2019. This epidemic has a perilous impact on the Chinese automotive industry. As per the China Association of Automobile Manufacturers, the overall vehicle sales saw a plummeting 18% year on year to 1.94 million units in February 2020. Moreover, sales of new energy vehicles (NEVs) saw a downfall of 54.5% in January 2020 as the COVID-19 weighs on the largest car market across the globe. Moreover, the aforementioned association has recently forecast a 10% in sales for the first half of 2020 and a 5% decline for the full year.
Wuhan, the origin of the COVID-19 pandemic, is known as the motor city which homes several auto plants such as General Motors, Honda, Nissan, Peugeot Group and Renault. The automobile production in Wuhan has hit a hard brake with automakers shutting their production for a duration of time. Following the same, production of automobile vehicles in Hubei province, which is the country’s fourth-largest production center for vehicles, has been disrupted over past months. Wuhan and Hubei account for around two-thirds of total China’s automobile production which reflects the hard impact of this pandemic on the country’s as well as the global automobile industry.
