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Challenges and opportunities for automotive sector reboot

Assembly line photo

The U.S. automotive sector is back in operation. West Michigan auto parts suppliers have also called back workers feeding the supply chain. What are the challenges for a successful reboot? Are we in a long period of unemployment, or is there a lasting return to the workplace as the economy reboots?

“If that’s the situation, the hope is we can start to rebuild vehicle sales, rebuild the system, if you will, the economy at a greater clip.”

Mike Wall is Director of Automotive Analysis at IHS Markit. He tells heading into 2020 the U.S. light vehicles sales forecast was 16.8 million units. The expectation now is about 12.5 million units. He says the auto industry’s challenge is an economy in a deep hole and the recovery will be slow. Still, there’s some comfort in the current situation.

“Vehicle sales have held up better than our expectations in April and even into early May. Now, I say better, it’s still horrendous numbers, but by the same token Considering how many states were basically effectively shut down, other than maybe online sales, vehicle sales actually still stayed pretty resilient.”

There is inventory, but Wall says it’s getting tighter especially within the popular pickup truck and crossover categories.

With consumer demand and dealers offering incentives the recovery is dependent on workplace safety and containing the spread of coronavirus and a second wave of COVID-19 outbreaks shutting down the economy.

I’m Patrick Center