New Auto Industry Startup Target for U.S., Canada: Early May
A few carmakers are now eyeing early May to resume limited production in the U.S. and Canada.
Honda says its current plant shutdowns in the region will end after May 1. The company had idled its powertrain and final assembly operations on March 23.
Likewise, Fiat Chrysler Automobiles now aims to begin slowly cranking up production in the U.S. and Canada on May 4.
Automakers Question Startup
A few producers say they hope to resume at least some operations within a few weeks. Volkswagen targets an April 12 startup date for its factory in Chattanooga, Tenn., on April 12. Subaru said last week it plans to reopen its U.S. plant on April 20.
BMW, Ford and General Motors have said that their North American facilities will remain closed at least through this month. None has announced when operations will resume.
Relaunch decisions are being made as the numbers of new confirmed cases and fatalities attributed to the coronavirus pandemic continue to rise. Automotive News reports that at least 18 plant workers in the U.S. have died of COVID-19, the respiratory disease caused by the virus.
Safety, Supply Chain, and Sales
The notably wide range of production plans reflects the difficulty of answering three key questions about factors that are difficult to define and vary by facility:
- Can a given plant be safely and sufficiently staffed?
- Will the supply chain be ready to support production?
- What is the market demand for the products to be produced?
Sales are a major consideration. The American market for new cars collapsed over the last two weeks, plunging 66% last weekend, according to Cox Automotive. The company says demand for used cars is down by about the same ratio.
Car Sales Incentives Soar
Carmakers are sharply ramping up incentives to buttress what’s left of the new-car market.
The National Automobile Dealer Assn. says average retail incentives at the end of March skyrocketed to a record $4,800 per vehicle, including $7,200 on pickup trucks. The trade group notes that many carmakers also are offering zero-interest loans for as long as 84 months to move new vehicles off dealer lots.
NADA now expects light-vehicle sales in the U.S. in 2020 will sag to between 13 million and 13.5 million cars and light trucks. The association previously forecast a retail volume of 16.8 million vehicles for this year, compared with 17.1 million in 2019.
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