CORONA CONCERNS
Auto industry weathering the storm
Motor vehicles travelling along a major corridor
AS the global automotive industry continues to be pummelled by the dreaded coronavirus (COVID-19), Jamaican players are bracing for its debilitating effects.
“There's no contingency plans. If there's a fallout from the manufacturing companies, there's very little you can do,” Kent LaCroix, chairman of the new-car umbrella group --- Automobile Dealers' Association of Jamaica (ADA), told the Jamaica Observer's Auto magazine. “So we have to just weather the storm.”
China is the world's biggest car market, and Wuhan, the city at the centre of the outbreak, is known as a “motor city” for being home to auto plants including Honda, General Motors, Nissan, Peugeot Group and Renault.
As the coronavirus spread, many auto companies across China closed their doors as part of the recent nationwide shutdown.
According to China Passenger Car Association, new auto sales slumped by 80 per cent year-on-year in February.
The impact on the auto industry is being felt beyond China's borders, as shortages of supplies from China stall production around the world.
For example, Hyundai and Kia recently stopped several assembly lines in Korea, and Nissan announced it would suspend its auto production in Japan. Volkswagen postponed production at all of its Chinese plants run in partnership with American company, Science Applications International Corporation.
LaCroix, who has nearly two decades in the driver's seat of ADA, said the fallout has not yet reached Jamaican shores.
“I don't think we've felt any negative results so far, because we've got a lot of stock. Business has been slow, notwithstanding the virus, for both new and used cars,” he said.
Last year, the new-car dealers sold more than 8,000 vehicles. Its members include: Stewart Automotive Group, local dealers of Mitsubishi, Suzuki, Land Rover, Range Rover and Mercedes-Benz; and Fidelity, dealers of Nissan.
LaCroix's used-car counterpart, Lynvalle Hamilton, said he too is monitoring the situation.
“We don't see any impact right now and I hope things remain that way,” said Hamilton, president of the Jamaica Used Car Dealers Association (JUCDA).
“Perhaps, later down the road it could affect us. It is, however, dependent on how it [the virus] is controlled,” he continued.
Last year, JUCDA imported more than 41,000 vehicles, a 13.9 per cent increase over the previous year. At total of 79.5 per cent of these vehicles were imported from Japan.
Hamilton said COVID-19 could put a damper on the local sector's gains.
“If it [the virus] affects the workers, it will slow us down getting vehicles, because you may have companies shutting down... and there's parts of China which is now a ghost town. So if it continues unchecked, it will affect us in that regard,” he said. “But for now, it's business as usual.”
The virus, first discovered in Wuhan, China, on December 31, 2019, has already killed more than 3,300 people.
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