Summary

This is the second of many Covid-19 reports on the automotive sector - this report reflects our perspective as of 24 March, 2020, although the outbreak is moving quickly, and some of the perspectives in this article may fall rapidly out of date

This second issue highlights the global light vehicle sale scenarios under COVID-19, whereby we have aimed to achieve substantive coverage with a measured approach through the selected regions: Asia-Pacific, Europe, North America and South America. Secondly, we have underpinned Original Equipment Manufacturer (OEM) exposure assessment, covering the world’s largest markets: China, North America and Europe.

Key Highlights

- Sectoral Concerns have moved on from being centered on supply chain disruption emanating from the source of the virus’s inception to the demand side of the equation.
- Initial reports revealed the deep-seated complexity of supply chains as production at FCA and Hyundai factories in Europe and South Korea was disrupted.
- However, given the size and importance of the Chinese market to the industry, global light vehicle sales were severely dented in January 2020.
- No parts of the automotive value chain will be undamaged in the short-term, with some more exposed than others
- Most plants in Europe and North America are now closed. For Europe we estimate the impact of the closures - taking the end of April as a cut-off point - at 1.3 million vehicles being cut from production
- All eyes will now be on China for first indications of how the industry can recover, as the country itself restarts operations and returns to some semblance of normality.

Scope

This report is part of our ecosystem of thematic investment research reports, supported by our “thematic engine”.

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- GlobalData has developed a unique thematic methodology for valuing technology, media and telecom companies based on their relative strength in the big investment themes that are impacting their industry.
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- The algorithms in GlobalData’s “thematic engine” help to clearly identify the winners and losers within the TMT sector.
- Our 600 TMT stocks are categorised into 18 sectors. Each sector scorecard has a thematic screen, a risk screen and a valuation screen.
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