As the U.S. auto industry braces for the biggest downturn since the 2008 financial crisis, analysts are counting the cost for Japan’s automakers — whose fortunes depend heavily on the world’s second largest car market.
The United States overtook Italy and China last week to become the country with the most confirmed coronavirus cases in the world. As of Wednesday morning Asia time, there were about 188,000 infections reported and more than 3,800 people killed by COVID-19, according to the latest data from Johns Hopkins University. Cities have been shut down and businesses shuttered as a result of the pandemic.
To reﬂect weaker U.S. demand, Goldman Sachs slashed its combined operating proﬁt estimate for seven Japanese automakers by 22% in a note to clients last week.
The revised forecasts are based on assumptions of a 30% drawdown in U.S. auto sales for 2020 to 12 million units, owing to the bank’s outlook for a major economic slowdown tied to COVID-19.
Although car sales are predicted to slump globally, the drop-off in shipments for Japan’s manufacturers will be most pronounced in North America, where Goldman sees an 18.6% fall, compared to a 9.6% drop for Europe and 3% dip for Japan.