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Under the sudden attack of COVID-19 around the world, car companies around the world seem to have undoubtedly survived the impact. According to CCTV Finance, Japan, where some car companies have already announced that they will stop production, is in short supply of overseas parts due to the spread of the epidemic, exaggerating the number of car companies that have stopped production to eight.

Prior to this, overseas demand plummeted due to the impact of the COVID-19 epidemic. Toyota announced on April 3 that it would stop production of seven production lines at five factories in Japan, including Aichi Prefecture and Fukuoka Prefecture. According to the shutdown plan announced by Toyota, the plant will stop production up to the 15th of this month. This also includes the disruption to the production and supply of Lexus-branded cars.

However, as the impact of the epidemic continues to spread, automobile production in the United States, Europe and other regions has also been announced to stop. As a result of a decline in the supply of overseas parts, coupled with a decline in consumer demand worldwide, eight car companies in Japan, including Toyota, Nissan, Honda, Mazda, Suzuki, Subaru, Mitsubishi and Daihatsu, have all announced that they will suspend domestic car production in Japan.

Although the shutdown is not the decision of individual companies or government control for Japan's top seven brands, it is undeniable that it is the result of falling global demand and a shortage of parts.

"We thought that with the gradual resumption of work and production in China, we would be able to achieve industrial recovery, but with the outbreaks in Europe and North America, we are once again facing difficulties under the epidemic," according to a senior executive of a Japanese automaker. So we can hardly see the end of the situation. "

As a pillar industry in Japan, the current grim situation is very confusing to them. Japan, as one of the three largest car producers in the world, produced 26.07 million vehicles worldwide in 2019. Based on the production and recent operation of these eight companies, production will be reduced by at least 30%. According to previous Japanese media reports, the total global production of the eight car companies in February was about 1.87 million vehicles, which will be reduced by about 15% compared with the same period last year, so production in March will decline further.

According to Goldman Sachs, the impact of the novel coronavirus outbreak on car production and demand will reduce profits of Toyota, Nissan, Honda, Mitsubishi and Mazda by 170 billion yen ($1.6 billion, or 11.2 billion yuan). Now that the shutdown has expanded to eight car companies, it also shows that the loss of profits will continue to expand.

Of course, stopping production means there is no car to buy, but in the current situation, even achieving full production is not ideal sales. Japan's exports of vehicles and parts to the United States, Canada and Mexico totaled about 6 trillion yen ($53.9 billion) in 2019, accounting for 1/3 of total exports to North America, according to Japanese trade data. Japan's car exports to the European Union are about 2 trillion yen, accounting for 1/4 of the total.

Of these, half of the Subaru brands made in Japan are sold to the American market. According to its total sales of 700000 units to the US market in 2019, 52 per cent were produced at the Indiana plant in Subaru and the rest were imported from Japan. Mazda and Nissan both export slightly more than 30 per cent of Japanese domestic production to North America, while Toyota exports more than 20 per cent; Mazda and Mitsubishi export about 20 per cent of their domestic production to Europe.

Therefore, with the current outbreak in Europe and the United States has not been effectively controlled, the local government has begun to appeal to citizens to reduce unnecessary travel, and local car sales will also be halted.

Not only Japanese automakers, but also three major American automakers, General Motors, Fiat Chrysler and Ford, decided on March 18 to accept the request of the United Auto Workers Union to temporarily close their plants in North America. The three major German automakers, Volkswagen, Daimler and BMW, have also announced a suspension of production in Europe. However, judging from the current growing epidemic, all the major car companies hope to resume production as soon as possible, but they can only be deterred.

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