CNBC is starting to post articles about the effects of the coronavirus on supply chains. While I tend to diminish what the mainstream media puts out there since it feeds on doom and gloom.
However, when the major manufacturing mecca for the global economy is shut down for more than a month, it has to have a severe impact. Yet, we didn't see much that explained how companies were doing in this regard.
Earlier I wrote about Amazon resellers starting to face some constraints in their product. Since most place their orders just before the Chinese New Year, this virus comes at a horrible time.
Now we see reports that automakers supply chains are potentially causing problems. Obviously, just one kink would affect the entire process. You cannot build a car with 99% of the parts. If one vital part is missing, the cars simply cannot be shipped.
This is something that the auto industry does not need. It is mired in a three year slump and 2020 is expected to see more than a 4% drop.
And that was before the virus came out.
Now automakers are searching for parts. General Motors airlifted some in to keep production going. There is no way that these companies can allow production to stop.
The automobile industry is capital intensive which means that any slow down is very costly. With the industry in transition due to the conversion to electric, companies are laying out a lot of money in preparation for new models.
This crisis could be fatal to some of the fringe makers.
If this becomes a problem that lasts a few months, it will radically alter the course for many of these companies. With Chinese car sales reported down over 80% year over year, we are looking at the largest automobile market being stopped completely.
It could be a significant impact on the global economy. We are to the point that it is likely that we are going to come out of this unscathed.
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Posted via Steemleo
Thanks for bringing up Amazon FSB, Amazon earning WILL BE Affected. Supply chains for auto. Some people have said to buy up IPhone 11s, if available, then resell for $2000+ when unavailable in the Apple Stores worldwide. It was said, Apple was buying 55 Business Class Seats from China to LA to distribute IPhones to the USA.....This of course has stopped. This week will be a come to Jesus moment for corporations to give up and have no outlook for Q1 & Q2.
Posted via Steemleo
the supply chain interruption is affecting the automobile makers and on the long run this would also affect the consumers too and that is a good experience anyone would want to witness....@taskmaster4450le
Posted via Steemleo
i totally agree with your opinion on this,and i also believe it would have negative effects on the world economy too....
Posted via Steemleo
what is even scary is that this will possibly have bad effects on the global economy and that is something alot of us do not pray for...
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