The production of light vehicles worldwide fell 42% in the second quarter of 2020 compared to the second quarter of 2019, mainly affected by Covid-19.
While many of the light vehicles manufacturing facilities in the world’s major markets had temporarily suspended their operations as of the first quarter of 2020, the main impact of such suspensions in North America and Europe was felt in the second quarter.
Since then, light vehicle production has resumed, although not necessarily at pre-shutdown production levels.
According to auto parts company Magna International, vehicle production fell 70 and 59% in North America and Europe, respectively. Meanwhile, that of China registered a 3% year-on-year increase.
To date, Mana International has not experienced any further closures at manufacturing facilities, but risks of disruption persist, particularly in the Covid-19 “hotspot” areas in which it operates, such as parts of the United States, Mexico, Brazil and India.
Original Equipment Manufacturers (OEMs) production volumes are generally aligned with vehicle sales levels and are therefore affected by changes in those levels.
Aside from vehicle sales levels, production volumes are often affected by a variety of factors, including: general economic and political conditions; work interruptions; free trade agreements; rates; relative currency values; prices of raw materials; supply chains and infrastructure; availability and relative cost of skilled labor; regulatory considerations, including those related to environmental emissions and safety standards; and other factors.
Overall vehicle sales levels are significantly affected by changes in consumer confidence levels, which in turn may be affected by consumer perceptions and general trends related to employment, housing and equity markets, as well as other macroeconomic factors.
Other factors that typically impact vehicle sales levels and therefore production volumes include: interest rates and / or credit availability; fuel and energy prices; relative currency values; regulatory restrictions on the use of vehicles in certain mega-cities; and other factors.