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North American Auto Manufacturing Challenges During a Global Pandemic
Bernard Swiecki, Director
3 April 2020
REMI
2CENTER FOR AUTOMOTIVE RESEARCH
THE CENTER FOR AUTOMOTIVE RESEARCH (CAR)
Automotive industry contract research and service organization (non-profit ) with more than 30 years experience forecasting industry trends, advising on public
policy, and sponsoring multi-stakeholder communication forums.
Consortia that bring together industry stakeholders to participate in working groups, networking opportunities, and access to CAR staff.
RESEARCH EVENTS CONNECTIndustry-driven events and conferences that deliver content, context, and connections.
Independent research and analysis on critical issues facing the industry.
3
End of the Cycle:N.A. Announced Automaker Investment by Region2009 to 2019
Region Investment Amount ($USD)
Canada $8.7B
United States $114.5B
U.S. Great Lakes $76.8B
South $23.8B
Mexico $24.7B
Total $147.9B
Note: U.S. Great Lakes includes: IL, IN, KY, MI, MO, and OH
South includes: AL, FL, GA, MS, SC, TN, and TX
6%
77%
17%
CENTER FOR AUTOMOTIVE RESEARCHReturn to OverviewSource: CAR Book of Deals, Q4 2019
4
Motor Vehicle and Parts Manufacturing Employment:Michigan vs. U.S. and Other StatesQ1 2009 – Q4 2019
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Nat
ion
al E
mp
loym
ent
Stat
e E
mp
loym
ent
Michigan Ohio Indiana Alabama Kentucky U.S.
Source: Bureau of Labor Statistics Return to OverviewCENTER FOR AUTOMOTIVE RESEARCH
5
U.S. Light Vehicle SalesPercent Change (YTD) Through March: 2020 vs. 2019
CENTER FOR AUTOMOTIVE RESEARCH
-25.0%
-7.4%
-12.7%
-30% -25% -20% -15% -10% -5% 0%
Passenger Cars
Light Trucks
Total
Source: Wards Auto; CAR Research
-506,969
+ -207,170
-299,799
Total
Truck
Cars
2,575,212
74.1%
901,300
25.9%
3,476,512
100%
6
U.S. Light Vehicle Monthly SalesJanuary 2017 – March 2020
CENTER FOR AUTOMOTIVE RESEARCH
900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
1,500,000
1,600,000
1,700,000
1,800,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Ligh
t V
ehic
le S
ales
2017 2018 2019 2020
Source: Wards Auto; CAR Research
7
U.S. Light Vehicle Monthly Sales and SAAR:March 2017 to March 2020
CENTER FOR AUTOMOTIVE RESEARCH
11.37
0
2
4
6
8
10
12
14
16
18
20
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20
Mo
nth
ly S
AA
R
Ligh
t V
ehic
le S
ales
(M
illio
ns)
Sales SAAR
Source: Wards Auto; CAR Research
8
CAR’s U.S. Light Vehicle Sales Forecast 2020-2027
JANUARY 2020
17.5 17.2 17.2 17.016.5 16.6
16.917.4
17.8 17.9 17.6 17.3
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
U.S
. LV
Sal
es in
Mill
ion
s
U.S. Light Vehicle Sales
Source: CAR Research, January 2020
9
Modeling the Pandemic
1. Production disruption due to shortages from China
2. Impact of the virus itself
3. Demand drop and recession
CENTER FOR AUTOMOTIVE RESEARCH
10
Understanding What Comes Next
• A stoppage, not a slowdown• Capital for recovery is a bigger issue• Direct precedent not available
• Knowing when we’ve hit bottom• Of the pandemic• Of the resulting economic downturn
• Duration is everything• Bringing production back becomes more difficult• Demand challenges are compounded
• Deferred sales today can be sales that never happened next year• New → Used → Existing Vehicle
CENTER FOR AUTOMOTIVE RESEARCH
11
Arsenal of Health
12 automakers and 9 other companiesLocation of supports
• 20 in the United States• 8 in Europe• 5 in Asia• 1 in Canada
Means of supports• 10 Personal protective items production/procurement • 8 Service providers• 7 Medical device production/procurement • 5 General medical items production/procurement• 3 Cash donation• 1 Volunteering
Thank youBernard Swiecki, Director - [email protected]