Supply chain and logistics constraints will hamper US auto sector recovery

Following the news that a number of vehicle manufacturers in the US are putting back schedules for manufacturing plant restarts;

David Leggett, Automotive Editor at GlobalData, a leading data and analytics company, offers his view:

“The US vehicle market is showing signs of life, though sales vary widely from state to state due to differences in the severity of the COVID-19 health crisis.

“Vehicle makers will naturally be anxious to be well-positioned to meet US demand as it starts to recover over the coming weeks and months.

“However, restarting their manufacturing operations after the COVID-19 induced halts won’t be easy. Volkswagen has admitted that it cannot restart operations at its Chattanooga plant as planned this week due to concerns over the ‘readiness of the supplier base’ as well as market demand.

“Similarly, Toyota has said – based on a review with its supplier and logistics network – that it will postpone US manufacturing operations from this week to the week of May 11.

“For importers, too, there are issues emerging in logistics due to shuttered dealer forecourts in many states and logjams at ports.

“The volume recovery to the sector in the US will clearly take some time, with manufacturers having to contend with considerable demand- and supply-side constraints and challenges over the coming months.”

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