Why is the coronavirus affecting car production?

Why is the coronavirus affecting car production? As we know, the automotive sector is fully globalised, and this is making it vulnerable to the global health crisis posed by COVID-19, better known as the coronavirus.

First and foremost, it is important to stress that there is no need for panic, since vehicles cannot be “contaminated” by the virus. The steel, aluminium and plastics have a strong “immune system” that prevents them from becoming infected. Although the materials resist the virus, the industry is not immune, and many markets such as China, Germany, Italy and even Spain are suffering the effects of COVID-19 significantly.

But what does the inclusion of a new virus have to do with vehicle production? Although it may seem nonsensical, it has a great deal to do with it. It is important to stress that the car industry depends on a high degree of human mobility. Some experts assert that “to contain such a highly mobile virus, capable of geometric expansion, it must be isolated and contained at all costs”.

“Vast regions of China and South Korea, the countries of origin of countless thousands of automotive and electronic components, were placed under official lockdown. Sick patients, people in quarantine, or healthy people who fear exposure are effectively under house arrest. Workers cannot go to work: the engineers, the drivers, the entire body of professionals who keep an industrialised society running, are largely sidelined”.

Is the car sector in danger because of the coronavirus?

It must also be borne in mind that the automotive sector has three tiers of suppliers. The third tier is made up of companies that work with raw materials. The second tier consists of manufacturers that supply the brands themselves, such as electronics firms that supply chips or microchips. Finally, the first tier is made up of companies that manufacture components related to the automotive world. Brands such as Bosch, Delphi or ZF are some of them.

As can be seen, the production lost through the coronavirus scenarios comes from these three tiers. Without these parts, it is impossible to assemble a vehicle properly. Some experts in the field have pointed out that “production can be shifted to other suppliers in unaffected areas, but “restocking” requires testing and validation, and always carries the risk of a decline in quality”.

All of this may lead to future buyers delaying their purchases. There is no need to panic, since everything points to markets returning to their former positions by late April or May, and sales returning to what they were before the arrival of this virus, which has taken up all the attention these days. We must remain calm and hope that specialists find a vaccine and that car manufacturers can get back to working normally.