The automotive sector is facing its biggest existential crisis since the 2007-2009 financial crisis with 97% of light vehicle (LV) manufacturing plants in Europe and North America temporarily shut down, says GlobalData, a leading data and analytics company.

Calum MacRae, Automotive Analyst at GlobalData, comments: “In Europe and North America, GlobalData’s latest estimates show that some 2.5 million LVs have been removed from production schedules at a cost of $77.7bn in lost potential revenue – if it is assumed the stoppages last at least up until the end of April.

“This time, the threats are not the one-dimensional threat to demand precipitated by the financial crisis. Supply chains are affected and workforces are affected. It is challenging to manufacture vehicles and components without endangering a workforce. Safe manufacture, if possible, can only be achieved at a reduced capacity.”

Efforts to suppress the spread of the coronavirus (COVID-19), with social lockdowns widely implemented affecting 20% of the global population, have decimated vehicle demand overnight. 

MacRae added: “In response, 168 out of 173 LV manufacturing plants in Europe and North America have called a halt to operations for varying amounts of time during March and into April. Additionally, production stoppages are not limited to North America and Europe, the virus is roiling the industry from Detroit, to Dusseldorf to Durban.

“What’s more, the shocks will ripple through the supply chain with supplier plants also being furloughed. It really is an unprecedented crisis, the in terms of its speed and scale. The auto sector faces its biggest existential crisis since the financial crash and subsequent recession of 2007-09.”