Utilization had already been declining from a healthy level of 70% and above, prior to the pandemic. Chart courtesy of LMC Automotive.
The financial health of the global auto business remains threatened by Covid 19 and it could be just as deadly. This comes from the latest forecast from consultancy LMC Automotive as it takes a steely-eyed look at the pandemic and its ongoing economic destruction.
While the past isn’t a 100% sure predictor of the future, “A second wave and stricter social controls pose a large risk to our central forecast,” LMC notes in its latest analysis. LMC projects that 2020 global assembly plant use is expected to fall to the lowest level ever recorded – just 51%. The pandemic-caused shutdowns during March and April had a profound impact on both the volume and use of plants globally.
However, North America’s capacity use is expected to reach its highest level in 2020. Light vehicle truck plants are grappling to meet demand since the shutdown.
But the Detroit Three still have global problems because of their large investments in new assembly plants in China, lower volume from EV plants, as well as general localization trends. Utilization had already been declining from a healthy level of 70% and above, prior to the pandemic.
Overall global plant use is expected to return to only the same level reached during the 2009 trough from the Great Recession by 2024.
The kicker: “overcapacity remains a risk for the industry from our May forecast low point,” says LMC. (see AutoInformed – LMC Automotive Now Projects Double the Decline of the Great Recession in Light Vehicle Sales During 2020 and COVID-19 Chaos as LMC Automotive Cuts Global Light Vehicle Sales Forecast by 3.7 Million Units)
About Ken Zino
Ken Zino, publisher (kzhw@aol.com), is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
Zino is at home on test tracks, knows his way around U.S. Congressional hearing rooms, auto company headquarters, plant floors, as well as industry research and development labs where the real mobility work is done. He can quote from court decisions, refer to instrumented road tests, analyze financial results, and profile executive personalities and corporate cultures.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Global Auto Business Threatened by Covid Second Wave
Utilization had already been declining from a healthy level of 70% and above, prior to the pandemic. Chart courtesy of LMC Automotive.
The financial health of the global auto business remains threatened by Covid 19 and it could be just as deadly. This comes from the latest forecast from consultancy LMC Automotive as it takes a steely-eyed look at the pandemic and its ongoing economic destruction.
While the past isn’t a 100% sure predictor of the future, “A second wave and stricter social controls pose a large risk to our central forecast,” LMC notes in its latest analysis. LMC projects that 2020 global assembly plant use is expected to fall to the lowest level ever recorded – just 51%. The pandemic-caused shutdowns during March and April had a profound impact on both the volume and use of plants globally.
However, North America’s capacity use is expected to reach its highest level in 2020. Light vehicle truck plants are grappling to meet demand since the shutdown.
But the Detroit Three still have global problems because of their large investments in new assembly plants in China, lower volume from EV plants, as well as general localization trends. Utilization had already been declining from a healthy level of 70% and above, prior to the pandemic.
Overall global plant use is expected to return to only the same level reached during the 2009 trough from the Great Recession by 2024.
The kicker: “overcapacity remains a risk for the industry from our May forecast low point,” says LMC. (see AutoInformed – LMC Automotive Now Projects Double the Decline of the Great Recession in Light Vehicle Sales During 2020 and COVID-19 Chaos as LMC Automotive Cuts Global Light Vehicle Sales Forecast by 3.7 Million Units)
About Ken Zino
Ken Zino, publisher (kzhw@aol.com), is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. Zino is at home on test tracks, knows his way around U.S. Congressional hearing rooms, auto company headquarters, plant floors, as well as industry research and development labs where the real mobility work is done. He can quote from court decisions, refer to instrumented road tests, analyze financial results, and profile executive personalities and corporate cultures. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.