Global Auto Production Dropped 16% Last Year Thanks to COVID-19 - IndustryWeek

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According to the International Organization of Motor Vehicle Manufacturers, global automotive production fell by 16% last year thanks to the impact of the COVID-19 pandemic and efforts to suppress it. OICA President Fu Bingfeng called 2020 “the worst crisis ever to impact the automotive industry.”

Regionally, the United States saw automotive production drop by 19%, slightly more than average worldwide, and produced a combined 8,822,399 cars and commercial vehicles.

In Europe, production fell by 21% on average, with its main producing countries reporting drops between 11% and almost 40%. South America saw production fall more than 30% as Brazil took the impact of COVID hard, and vehicle production in Africa slid more than 35%.

Asian producers fared better than vehicle manufacturers elsewhere. Automotive production on the world’s largest continent fell about 10%, and the OICA reports that China’s accelerated recovery led vehicle production there to fall only 2% over the course of the year. Asia accounts for a 57% share of global vehicle production.

The 2020 results follow up on negative results from the year before. In 2019, world auto production fell 5%, ending a ten-year streak of growth. 2020, said Bingfeng, “wipes off all the growth made over the last ten years.” In all, 78 million vehicles were produced last year—a figure equivalent to the amount of cars sold in 2010.

On the bright side for automobile manufacturers, the OICA says the last few months of 2020 saw gradual recovery in consumer demand for trucks and cars.

“Demand for mobility for persons and goods is expected to remain high,” said Bingfeng, although he cautioned that it would not be the same as in the past.

According to figures released March 16 by the Federal Reserve, factory production dipped in February as severe winter storms in Texas and the southern U.S. led to power outages and damaged factories. Total industrial production for February dropped by 2.2%, while manufacturing output dropped 3.1%. Capacity utilization for manufacturing slipped 2.3% to 72.3%.

The Federal Reserve said the severe weather forced petroleum refineries, petrochemical facilities, and plastic resin plants offline for most of the month due to electrical outages and damage: The chemical materials market group saw a loss of 14.5%. Without the winter storms, the Federal Reserve estimated that manufacturing as a whole would have only fallen about half a percentage point.

The loss of production ended a six-month trend that saw industrial production improve by about 1% each month since the third quarter of 2020. Despite manufacturing growth since the first half of 2020, overall production is still 4.2% below where it was in February 2020.

Specialized indexes for durable and nondurable manufacturing fell by 2.6% and 3.7%, respectively, while publishing and logging manufacturing fell 0.5%.

In durable manufacturing, the transportation industry saw output fall 8.3% as automakers confronted an industrywide shortage of computer chips. In the same sector, though, primary metals and aerospace manufacturing both recorded slight improvements.

Severe weather losses weighed heavily on nondurable manufacturing output due to its impact on Texas chemical operations. A Federal Reserve index for the chemicals industry fell 7.1% while its coal and petroleum index dropped 4.4%.

Emphasizing the outsized industrial impact of the severe weather spat, the Federal Reserve noted that utilities output jumped by 7.4% as the uncharacteristically cold weather in the southern state led to spikes in demand for power.

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