Major auto parts supplier Visteon Corp (VC.O) on Thursday forecast global production volumes for the auto industry to fall between 20% and 25% this year and warned it would be a couple of years before they returned to 2019 levels.
The U.S. auto industry has been struggling to recover after the coronavirus pandemic shutdown factories and disrupted global supply chains for two months.
“Even before COVID-19, the auto industry was slowing down globally and most notably in China, and COVID-19 has dealt a significant blow, pushing the industry to levels that have not been seen in a long time,” Visteon Chief Executive Officer Sachin Lawand said at a Deutsche Bank auto industry conference.
IHS, which closely tracks automotive sales and production trends, has forecast global light vehicle sales to fall 22% to 70.3 million units in 2020, from its prior estimates of a more than 12% drop.
However, Lawand said China has now rebounded, with Visteon, a key supplier to General Motors (GM.N) and Ford Motor Co (F.N), at almost pre-COVID production levels in China.
The automotive industry in the United States has been ramping up after the pandemic-driven shutdown, and major automakers have been keeping a close eye on suppliers in Mexico to ensure the pandemic does not disrupt the flow of auto parts.
Yet another supplier BorgWarner Inc (BWA.N) said on Thursday its plants in North America and Europe have been running for almost a month, but flagged volatility in production schedules for OEMs.
Detroit automakers resumed production in the United States on May 18, and Mexico’s export-focused auto industry has been slowly reopening under pressure from its top trade partner, the United States.
Visteon’s shares, which have fallen 16.8% this year, were down 6.8% at $70.85 in late morning trade.