North American vehicle makers steer a course through Covid
By Marcus Williams2021-02-08T14:38:00
This year’s Automotive Logistics and Supply Chain North America Live conference revealed how a strong rebound in North American vehicle sales has taken the supply chain by surprise and exacerbated the misalignment in inbound supply and capacity caused by the Covid-19 shutdowns.
Manufacturing is being hit by inbound parts shortages because of congestion at the ports and a lack of subcomponents, particularly semiconductors. Parts suppliers and vehicle manufacturers are working hard to meet demand despite these challenges but are doing so with a reduced labour force and under existing workplace safety protocols. As a consequence, inventory is not likely to start its gradual recovery until the end of 2021.
Global sales fell 14% last year to 76.8m, a slump far worse than the global recession of 2008, but are forecast to recover to above 84m this year (+10%), according to figures from business analysis firm IHS Markit. There was a strong rebound in most markets in the second half of 2020, though some have grappled with a second wave of Covid lockdown restrictions, including countries in Europe. Other markets continue to face elevated levels of infection, including the US and India. However, those high rates of Covid do not seem to be restricting new vehicle sales and carmakers have embraced online sales options throughout the crisis. Market optimism is also now being bolstered by the prospect of wider vaccine distribution.