an Outbreak of coronavirus can lead to a decrease in production and sales of automobiles in all markets, predicts Fitch Ratings.
China, where the growing epidemic of coronavirus, is the leader of the global automotive industry, and competes with the U.S. for first place in the auto market. Created in China the production of cars all of the major global auto giants. In addition to the cars in the country large-scale production of components for auto plants in other countries.
China accounts For 30 percent of global sales. “We expect that sales will start to recover in April and will accelerate in the second half of 2020,” predicts Fitch Ratings.
Now in China are introduced transport restrictions and suspended production in various sectors to halt the spread of the virus. This will lead to a drop in new car sales in China and supply disruptions in the global manufacturing of automobiles.
Most automakers in China are seeking to resume production in a few days, but the failures associated with the work or the supply chain will continue until the end of February or beginning of March. In the region Hubei, where the epidemic began, accounts for 8.8 percent of car production in the country.
German automakers and suppliers are most at risk in Europe due to the coronavirus. Daimler and BMW sell 30 percent of all its cars in China, and VW is about 40 percent. The share of China accounted for 10-15 percent of total sales of major European suppliers, but their share of income in China is higher because these operations are typically more profitable.
This will add problems to the auto sector in 2020, I believe Fitch Ratings. According to analysts, the impact of the virus is likely to be limited if the outbreak is short-lived, and its impact will be felt only over the next few months. While sales and production will recover quickly.