Barra: Some Post-Coronavirus Output Will Lag Capacity

It sounds like a fine point, but it’s an important distinction: As automakers report they will have factories back to full, pre-coronavirus capacity in the next few weeks, that doesn’t mean full, pre-coronavirus volume. Total overall volume will be considerably lower, in line with lower demand.

“It will depend by segment,” General Motors Chairman and CEO Mary Barra says during a Monday webinar hosted by the Automotive Press Assn.

For example, demand stayed relatively high for GM’s fullsize pickups during the pandemic-induced shutdown, when no new units were being made. So those plants will be running hard to restock dealer showrooms.

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“In many places, we’re going to be running at the same volume capability (as before) because we’re rebuilding the inventories, because we entered the COVID period with lower inventories than we generally want to have,” Barra (left) says.

Overall, industry analysts expect a seasonally adjusted annual sales rate for 2020 of 14 million to as few as 12 million, down from light-vehicle sales of 17.1 million in 2019, Barra says. Wards Intelligence is forecasting about 13.3 million units.  “So, that, by definition, is smaller,” she says. “No one exactly knows what the SAAR is going to be for the U.S. this year.”

Barra is careful to point out those sales estimates for 2019 are from industry analysts and are not an official GM forecast.

GM says it expects to have its plants in the U.S. and Canada back to full capability by the end of June, but plans to tailor production to demand.

Separately, Ford says it expects to have its U.S. and Canadian plants back up to full capability by July 6, with a similar high priority on fullsize trucks.