US Car Production Is Fine for Now Amid Coronavirus, but Experts Predict a Big Sales Drop

Today on Speed Lines: We're also talking about making semi-autonomous technology safer.

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Welcome back to Speed Lines, The Drive's morning roundup of what's important in the world of autos and transportation. We hope you are staying safe and sane during this challenging time. Please keep washing your hands, and don't do anything I wouldn't do.

Car Production In America: Fine For Now

The coronavirus outbreak is, admittedly, a scary thing. The NBA has canceled its entire season. Italy, as a country, is under total lockdown. Even some hospitals in America are already overwhelmed. Not everyone has the luxury of just working from home. It's not okay to panic, but it is smart to be prepared, focused and smart. 

In a lot of ways, the automotive industry has been on the front lines of this battle, at least from an economic perspective. Manufacturing powerhouses like China and Italy are taking a huge hit, and sales in China, the world's largest car market, are in the toilet. The entire parts and manufacturing supply chain has already been disrupted too.

For now, at least, we're not seeing an impact on American auto manufacturing, reports Reuters:

Officials with Detroit automakers General Motors, Ford Motor Co. and Fiat Chrysler Automobiles on Wednesday said there has been no disruption to U.S. production.

Automakers and their suppliers have avoided shutdowns in the United States so far due to parts already en route, as well as suppliers resorting to air shipments or resourcing the supply of parts to different plants, supplier executives and industry consultants said.

GM CEO Mary Barra said last week the No. 1 U.S. automaker's vehicle production was secure from parts shortages "quite far into this month." Suppliers and industry consultants contacted by Reuters echoed that there should be no issues through at least the end of the month.

Again, that's for now. Reuters today also reports that Morgan Stanley expects the outbreak could send auto sales down 9 percent this year, which is a huge drop on the heels of several years of plateauing new car sales: 

In the United States, Morgan Stanley auto analyst Adam Jonas wrote that "demand shock" triggered by the spread of the virus could cause consumers to delay large purchases such as new pickups, SUVs, crossovers and cars. He predicted U.S. sales could drop to 15.5 million vehicles, from 17.1 million in 2019. LMC cut its forecast for 2019 light-vehicle deliveries to 16.5 million from 16.8 million.

As anyone who lived through the Great Recession will tell you, there are two big measurements for the health of any economy: cars and houses. If people aren't buying cars and they aren't buying houses, you're in horrible shape. 

Our biggest concerns should be around public health right now. But the economic impact of this virus is shaping up to be a severe and long-term one too.

Car Sales In China: Not Great

As Speed Lines reported earlier this week, we're seeing the earliest, smallest stages of production recovery in China. But the country's manufacturing sector has a long way to go. And automakers are seeking government assistance to drum up new car sales, which were already in pretty steep decline in China. Once more from Reuters:

Their wish list includes cuts to the sales tax on smaller vehicles, measures to support sales in rural markets and an easing of vehicle emissions requirements, the China Association of Automobile Manufacturers said.

February sales in the world's biggest auto market tumbled to 310,000 from a year earlier, falling for a 20th straight month.

"China's auto sales for February returned to levels not seen since 2005," said Chen Shihua, a senior association official.

Sales of new energy vehicles, which include battery-electric cars, fell for the eighth month in a row, also hurt by a rollback in government subsidies.

The China Association of Automobile Manufacturers predicts a rebound in March, and you know every automaker wants to see that happen.

IIHS: Automated Driving Systems Need To Keep People Engaged

With, well, everything that's been going on lately, we've seen a bit of a slowdown on the autonomy front. But I think the big story in that world this year will be how to keep drivers who use semi-autonomous systems in their cars from reading books or playing video games or taking naps or whatever. These systems have to do a better job of keeping drivers engaged, and from being stupid. All this comes on the heels of the National Transportation Safety Board's report on how a Tesla Model X with Autopilot didn't adequately monitor and warn its driver before a fatal crash in California.

The Insurance Institute for Highway Safety agrees, reports Automotive News:

IIHS, a nonprofit group funded by auto insurers, issued a set of safety recommendations for the design of such systems. The guidelines address ways to minimize driver disengagement and system misuse.

Several Level 2 systems — the highest level currently available for vehicles in production — control acceleration, braking and steering to keep the vehicle traveling at a set speed and centered in the lane, while maintaining a selected following distance from the vehicle ahead. The systems require the driver to remain attentive and ready to intervene, but IIHS said some designs make it too easy for the driver to disengage and heavily rely on the system.

"Unfortunately, the more sophisticated and reliable automation becomes, the more difficult it is for drivers to stay focused on what the vehicle is doing," David Harkey, president of IIHS, said in a statement. "That's why systems should be designed to keep drivers actively engaged."

The group's recommendations include direct and indirect methods of monitoring and detecting driver disengagement, such as eye and head orientation, steering wheel input and lane-departure frequency.

Good. And remember: You don't own a self-driving car. Sorry!

On Our Radar

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‘Revenge Spending’ Spurs Chinese Luxury Rebound From Virus (Bloomberg)

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A ‘New Normal’ for Hospitals on the Front Lines Fighting Coronavirus (NY Times)

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Your Turn

What's your take on coronavirus? How are you preparing?