Auto components manufacturer Robert Bosch has warned that the downturn in automotive industry activity resulting from the coronavirus pandemic will be “significantly steeper” than that seen during the Great Financial Crisis, the Financial Times reports. The firm reported a 17% year over year slide in sales due to a mixture of reduced demand and factory closures.
To a certain degree the “worse than the Great Financial Crisis” prognosis has already occurred.
As discussed in Panjiva’s research of April 8, U.S. sales of cars and light trucks fell by 38.1% year over year in March with foreign-built vehicles dropping by 49.1%. That was faster than the peak downturn of 34.1% year over year seen in February 2009. The latter was the 14th month of slower sales whereas sales in February 2020 were actually higher than a year earlier. For context March’s decline was also the fastest since the data series began in 1968.
Source: Panjiva
The downturn in demand from U.S. automakers hadn’t necessarily translated into reduced international trade linked to Robert Bosch in Q1. Panjiva’s analysis of U.S. seaborne imports linked to Bosch as well as multimodal deliveries from Mexico shows volumes shipped to U.S. customers increased by 2.9% year over year in the first two months of the year. Seaborne imports specifically only declined by 0.8% year over year in March.
The seaborne shipping to the U.S. also includes a marked switch out of shipments from China, which fell by 53.3% in March as a result of COVID-19 related supply chain disruptions, in favor of those from Europe which increased by 18.9%. The latter may drop off following the widespread implementation of industrial lockdowns in Europe.
There may also be a downturn in shipments from Mexico, which increased by 10.2% year over year in the first two months of the year. The government has since deemed automotive manufacturing as non-essential. Bosch will also face supply chain challenges in the second part of the year as the result of the roll-out of the U.S.-Mexico-Canada Agreement from July 1.
Source: Panjiva