Coronavirus sends Mexico, Brazil auto output into deep swoon

By Marcelo Rochabrun and Anthony Esposito SAO PAULO/MEXICO CITY (Reuters) - Auto production in Mexico and Brazil, Latin America's top producers, plunged by an unprecedented 99% in April as a result of the coronavirus crisis, with the two countries building a total of just 5,569 units. In normal times, Mexico and Brazil produce over half a million cars a month combined

Reuters May 09, 2020 00:06:01 IST
Coronavirus sends Mexico, Brazil auto output into deep swoon

Coronavirus sends Mexico Brazil auto output into deep swoon

By Marcelo Rochabrun and Anthony Esposito

SAO PAULO/MEXICO CITY (Reuters) - Auto production in Mexico and Brazil, Latin America's top producers, plunged by an unprecedented 99% in April as a result of the coronavirus crisis, with the two countries building a total of just 5,569 units.

In normal times, Mexico and Brazil produce over half a million cars a month combined. The industry represents scores of jobs and several percentage points of their respective country's GDPs.

"The situation is difficult and dramatic," Luiz Carlos Moraes, president of Brazil's automakers association, told reporters.

The statements on production, made on Friday by Mexico's Inegi statistics association and Brazil's Anfavea automakers association, are the first available window into the sheer extent of the crisis for automakers in Latin America.

The crisis is putting jobs in peril and raising questions about the sustainability of the industry's international supply chains, much of which goes back to China. The poor results may also be used by auto executives to obtain government aid.

Mexico and Brazil are key bases for global automakers, including General Motors Co, Ford Motor Co, Volkswagen AG and Fiat Chrysler.

Shipments from Mexico, which is more dependent on exports to the United States, fell by 90% compared with March to just 27,889 units, Mexico's Inegi said.

Brazil is more focused on its domestic market but is a significant exporter to Argentina. Exports fell by 77%, Anfavea said, to 7,200 units.

Sales overall plummeted by two-thirds in Brazil to 55,700 units. Mexico did not disclose sales numbers.

In Brazil, the coronavirus pandemic is deepening a years-long crisis from which the industry was already struggling to recover.

Brazil has the capacity to produce more than 400,000 cars per month, due to expensive bets made just before the country underwent its worst economic crisis on record in 2016.

The coronavirus crisis may well exceed the damages caused then, from which the auto industry never fully recovered.

(Reporting by Marcelo Rochabrun in Sao Paulo and Anthony Esposito in Mexico City; Editing by Dan Grebler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.