Car Production To Decrease By 2.5% Amid Coronavirus Outbreak: Is A Parts Shortage Possible?

As the coronavirus continues to spread around the world, automakers are feeling the pinch as production shutdowns occur, and parts supplies dwindle.

Nissan, Hyundai, Kia, and GM have all had to temporarily shut down plants due to the outbreak. The increased number of coronavirus cases in Europe and the U.S. could impact carmakers, even more, causing production to decrease by as much as 2.5% in 2020, according to Moody’s Investor Service (via CNBC).

Automakers are creating contingency plans to find parts and prevent shortages so that they can continue production without delays. Nearly every major automaker and supplier has reportedly said that they are closely monitoring the coronavirus situation.

General Motors, for example, has reportedly airlifted parts for its North American truck production after identifying a shortage. Fiat Chrysler Automobiles is also looking for parts alternatives while Toyota has set up a task force and war room to keep a watchful eye on the epidemic, CNBC said.

The automotive industry is vulnerable to supply chain shortages as carmakers look to operate lean to free up capital and keep their operations running with minimal overhead. But a disruption in parts supplies can cost millions or billions in lost production if a solution is not found first, according to the news outlet.

According to the World Health Organization, the coronavirus has spread to at least 37 countries, with more than 85,000 cases confirmed, including 2,933 deaths.