Coronavirus has industry stressing out globally

Even as Chinese health authorities reported a slowing of the spread of the COVID-19 coronavirus outbreak there, the world auto industry is now coping with the fear of it.

The epidemic may have reached its peak in China, its epicenter. But automakers around the world, their supply chains, industry vendors and personnel rose to heightened alert last week, quarantining select operations and canceling activities to avoid spreading the disease.

The moves affected product ramp-ups and marketing events, pushed down stock prices and chewed into industry revenues as decision-makers grappled to respond.

Hyundai Motor Co. halted production Friday, Feb. 28, at its Ulsan plant in South Korea that produces the popular new Palisade SUV after a worker there tested positive for the coronavirus.

The company did not say when production would resume.

Organizers of the annual Geneva auto show late last week canceled this month's event for fear of bringing industry audiences together from around the world during the epidemic.

Fiat Chrysler Automobiles moved to seal off its European operations. The automaker said in a letter to suppliers and visitors last week that at all of its European facilities, it will restrict the access of those who have been in one of 13 Italian municipalities affected by the virus outbreak. The letter said FCA also is banning anyone who has been in China or another Asian country in the previous 15 days from entering its facilities.

The impact of the health crisis roiled the global industry:

• French automakers PSA Group and Renault extended the shutdown of their operations in China. A PSA spokeswoman said it is up to authorities in China to decide when production will resume, though its factory in Wuhan — which PSA operates with Dongfeng Motor — is scheduled to reopen March 12. Renault's factory in Wuhan will be closed until March 10, a spokeswoman for that company said.
• FCA said in a regulatory filing last week that epidemics such as the coronavirus pose a threat to its business, although the automaker added it is too soon to determine how seriously it will affect consumer demand and its manufacturing capacity.

• General Motors said in a statement to Automotive News on Thursday that it will not disclose the restart date of each plant in China, as the situation remains fluid, but that it has experienced no impact on U.S. production as a result of supply issues caused by the coronavirus.
• A Spanish plant majority-owned by supplier Denso may halt some production of electronics components because of a shortage of parts from China, according to Reuters.
• Aptiv said the coronavirus could hurt revenue by $150 million to $200 million and operating income by $60 million to $80 million, according to an SEC filing.
• Seating supplier Adient said in an SEC filing that it now expects adjusted earnings before interest, taxes, depreciation and amortization for the year to shift toward the low end of its outlook range of approximately $870 million to $910 million. "Given the rapidly developing worldwide information regarding the coronavirus and its potential impacts," Adient reported, "the inherent difficulty in predicting when Adient's customers' plants will be fully operational, the potential for lower consumer demand — as well as additional possible impacts on Adient's facilities, employees, customers, suppliers and logistics providers — Adient is unable to quantify any further potential impact from these developments at this time."
• Tenneco has warned that the coronavirus could have negative impact of approximately $150 million on value-add revenue in the first quarter, and $50 million on adjusted EBITDA.
• Visteon has informed investors that it estimates a $60 million sales headwind from the coronavirus in the first quarter.
• The Beijing auto show, which was scheduled for April 21-30, has been postponed because of the outbreak and has not yet been rescheduled.

Concern over the epidemic led to last week's cancellation of the Geneva auto show. The decision came after a Swiss government mandate that no events with more than 1,000 people are allowed to take place until March 15.

One case of the illness was confirmed in Switzerland last week. Many companies already had begun to reduce the number of people assigned to attend the event in the days before. The show was to take place March 5-15.

The coronavirus has killed more than 2,700 people and infected approximately 79,000 across the globe since first being discovered in December in Wuhan, China, a city in which many auto companies operate.

Auto sales in China fell sharply in February, according to the China Association of Automobile Manufacturers.

Writing in a blog post last week, Pete Kelly, managing director of LMC Automotive, said the global industry could see a decline of 3 million to 4 million units in total light-vehicle production numbers from 2019's approximate 90 million because of the coronavirus disruption.