How the coronavirus could affect the Detroit auto show
DETROIT - With concerns over a widening outbreak of the coronavirus hitting the economies around the world, the government of Switzerland announced it was canceling the Geneva auto show scheduled for this March.
The cancellation encompassed all public and private events involving more than 1,000 people until at least March 15. Spotlighting just how far-reaching concerns over the public health crisis have become, officials in charge of domestic car shows are now fielding questions about the status of their events, including the North American International Auto Show in Detroit.
As of now, there are no plans to cancel the NAIAS.
"We are closely monitoring the latest information about the novel coronavirus and are reviewing our policies and procedures," read a statement from NAIAS Executive Director Rod Alberts. "We remain optimistic that these health issues will be resolved before the 2020 NAIAS Occurs in June. At this point, we remain confident that we will be producing a great show that you won't want to miss."
This year's Detroit auto show is going to be the city's first scheduled for June, breaking years of precedent of hosting the show at the start of the new year.
However, if the coronavirus outbreak isn't contained and more cases are registered in the U.S., that could change plans this summer. North America has largely been insulated from the spiking number of newly reported cases that harder-hit countries like China, Japan, Italy, and Iran are seeing.
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Currently, only 60 cases of COVID-19 have been reported in the U.S., compared to the tens of thousands of new cases that have rocked Asia. Shortly after President Trump announced plans to combat the virus's spread on Wednesday, California reported its first case of local transmission of the disease.
Despite increasing concerns of production slowdown within the auto industry, Detroit's auto market has largely been insulated from economic hit that foreign markets are taking, said Peter Nagle, an automotive analyst from IHS Markit.
"Right now, there's not a lot of exposure for the Detroit Three," Nagle said. "Thankfully, and this is just hindsight as 20-20, the Detroit area made concerted efforts to shift products from China. While there is a slowdown, it's not hitting the industry here because exports made by domestic automakers have already been falling in China."
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It's unclear when the decline in production will ripple through Detroit's market, as parts arriving via shipping containers left international ports before the outbreak. While companies have been able to buy easily-resourced parts from outside China prior to the coronavirus, other products requiring larger economies of scale have remained in China and will be difficult to resource quickly. Those include electronic control units and lithium-ion batteries.
Nagle said those parts shortages won't be felt until late March, at the earliest.
"If China's slowdown continues and it becomes bigger than an automotive problem - that's where we'll see the impacts," Nagle said. "If more cases get reported here, we may start to see slowing sales. That's the biggest risk to Detroit manufacturing."
Jack Nissen is a reporter at FOX 2 Detroit. You can contact him at (248) 552-5269 or at Jack.Nissen@Foxtv.com