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Wednesday, 24 June 2020 19:57

Pre-Pandemic Auto Production to Resume by Month End

Written by Jason Unrau, CBT Automotive

Index

Demand for new cars has been stronger than expected after the coronavirus pandemic, according to Wards Intelligence data.

The deep V-shaped recovery is trending to nearly resume normal sales figures in the second half of 2020. That surprising trend, combined with automaker shutdowns that lasted for six weeks or more, has led to an inventory shortage on some popular models.

 

Pickup trucks and SUVs have been surpassing expectations. That’s even despite models like the Ford F-150 and Chevrolet Silverado occupying top spots on the bestselling vehicles list for years.

 

Several of those popular models are running low on stock. The Chevrolet Silverado is running on 37 days supply, while the GMC Sierra has 31 days supply remaining. That’s nearly half of the goal number of 60 days supply.

 

The good news is that auto makers are set to resume normal production. Fiat Chrysler Automobiles and Ford Motor Company restarted production on June 22, while General Motors Co. has planned to resume normal output by the end of June.

 

“We’re still targeting to be at normal capacity by the end of June or sooner, if possible, but obviously it’s a very fluid situation," said GM CFO Dhivya Suryadevara.

 

Most carmakers have been back to work for roughly five weeks including Volkswagen, Toyota, Hyundai and Detroit’s Big Three. That production has been at a limited capacity due to limited parts availability from suppliers and expected lower demand, as well as complications with PPE and health regulations to maintain required safety measures. 

 

Last week, Fiat Chrysler announced it would be working through the usual summer shutdowns as its two Michigan truck plants, the Ohio-based Jeep assembly plant and a factory in Canada.

 

That’s bound to be the norm for factories producing trucks and SUVs in North America as demand simply can’t be satiated.

 

The coronavirus has not yet been beaten and continues to surge in areas of the U.S. The resumption of normal buying activity indicates a few things coming down the line that dealers should note.


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