An unintended but not surprising effect of the COVID-19 plague see the use of mass transit plummeting as driving use remains resilient, consultancy LMC reports this morning,
“As US states and European countries come out of lockdown, a pronounced preference for driving is emerging,” LMC says. “Travelers are avoiding public transport because of capacity and reliability issues, and to avoid the risk of infection. This pattern is evident in nearly all countries — even those that have almost completely suppressed the virus — and across different data sources.”
The -24,000,000 vehicle drop in annualized global production – from ~94m to 70m – begs the question: Is this trend durable – good news for automakers, bad for mass transit promoters – or just a passing anomaly?
LMC notes that OEM assembly plant downtime, due to lock-downs during the pandemic, vary significantly, with China averaging only a three-week shutdown period, with “sustained improvement now showing. China is expected to return to pre-pandemic volumes before the end of 2020.”
Asian vehicle plants were shut on average of four and a half weeks. Overall output going forward will be squeezed more from lower export demand than domestic demand.
Perhaps more important for the US economy, especially for the gravely wounded and debt encumbered Detroit Three, re-openings in Europe and North America are crucial along with unknown levels of consumer demand. Both markets were down for almost seven weeks.
Europe might have more plant stoppages, due to slow demand, but North American build may not be able to meet demand in the US, LMC says. South America, with only 60% of the plants open at extremely low daily output and with COVID cases in Brazil still rising significantly, the shutdowns likely will linger on, adding to the risk in the region.