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When will US auto manufacturing recover to 80% of pre-COVID-19 production levels?
The automotive industry directly employs hundreds of thousands of people in the US, and indirectly affects the jobs of millions more through a complex and globally integrated supply chain.
In February 2020, the Bureau of Economic Analysis reports US automakers produced 11.4M cars and trucks, consistent with the average production rate of 11.5M cars and trucks per month between 2015-2019. In March, that number fell to 7.2M, and in April it cratered to 176,000.
In early May, news outlets began reporting small numbers of plant re-openings, as manufacturers prepared to resume operations with coronavirus protective measures in place. The first of the three biggest US automakers to make its move, Toyota began it’s reopening process on May 11, with 13 assembly plants coming back to work. Then nearly 20 GM assembly plants reopened on May 20, but the company has been forced to close two plants due to COVID-19 outbreaks. Similarly, when Ford began reopening on May 20, they were forced to temporarily shut down production and send thousands of workers home.
A Frost & Sullivan auto industry analyst wrote in April:
The... likely scenario... I see unfolding is that of a Severe Pandemic where persistent bottlenecks will prevent manufacturing plants from realizing full capacity utilization in the near-term. Most countries will resume only partial vehicle production by mid-June before ramping up to full capacity by August. As a result, I anticipate annual light vehicle production volumes dropping by about 21% from 2019 levels before subsequently picking up pace in 2021 and finally overhauling 2019 levels by 2023.
But auto makers may be better prepared to deal with a severe economic downturn than they were in the previous major crisis. Lessons from the 2008 global financial crisis are front and center for auto executives right now, according to interviews conducted by Automotive News Europe:
Experts say automakers have taken steps to ‘crisis proof’ their businesses since 2008. Most notably, they have much more cash and available credit on their balance sheets.
Yet even with cash on hand and plant reopenings beginning, automakers face another challenge: global demand for cars had been in decline well before the global pandemic hit, which all adds up to intense speculation about what the “new normal” in the automotive industry will be.
When will US auto manufacturers produce autos and trucks at 80% of pre-COVID-19 closure levels?
This question resolves as the first time when the total level of auto and truck production reaches at least 9.2M (i.e. 80% of the 11.5M per month level).
To pin down a specific day, we will linearly interpolate between the end of the last day of the first month when the production level meets the 9.2M threshold and the end of the last day of the prior month. Specifically, let be the last day of the last month with production 9.2M, and let be the last day of the first month with production . Then the exact resolution date will be given by:
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