The Detroit Auto Show’s Move to June May Have Prevented a Bigger Coronavirus Disaster

Traditionalists and heavy coat enthusiasts scoffed at the decision to move the Detroit Auto Show from January to June starting this year, even though the schedule change was made to drum up attendance and allow for outdoor events. Of course, now it won't be happening at all in 2020, as the show's TCF Center has been converted into a coronavirus field hospital. 

But The Detroit Free Press reports that the choice to move the show may have helped the region "dodge a Mardi Gras-sized bullet" this year. The show draws thousands of journalists, auto industry executives, engineers, employees of supplier companies and more from all around the world, including and especially from China, where the disease was already in force. If the show had happened in January as usual, it's entirely possible we would've seen an early and aggressive spread of coronavirus in Michigan well before the region was prepared for it—and even now, Detroit is a hot spot for the outbreak. 

Initially, I and others thought that it could've happened in January since that predated the spread of the virus in America. But this article argues the opposite would've been true: 

“It could’ve been a catastrophe,” said Dr. Peter Gulick, an infectious disease specialist at Michigan State University's College of Osteopathic Medicine about the timing of an outbreak in Detroit. “It was an environment for disaster. Detroit could’ve been the epicenter of COVID-19 for the whole country.”

[...] Detroit’s TCF Center and the North American International Auto Show could have been an even more fertile ground for virus transmission than Mardi Gras. Both events last a couple of weeks, but NAIAS, as the show is called, draws more than 800,000 people during the show period to a single building, while Mardi Gras parades, balls and celebrations happen throughout New Orleans.

Wuhan is one of China’s automotive hubs, with assembly plants for GM, Fiat Chrysler, Honda, Renault, Peugeot, Nissan, multiple Chinese automakers and dozens of suppliers. Anybody involved with China’s auto industry can be expected to have direct or secondhand contact with Wuhan. In 2019, 200 journalists from China and, dozens of people from that country's automakers and suppliers and an unknowable number from global companies’ Chinese operations, attended NAIAS.

Let me tell you from years of experience—and this story notes the same—that the January Detroit show was already a petri dish for cold, flu and pneumonia on a good year. Let's be thankful corona didn't get added to that or else Michigan would've been looking at an untold catastrophe. 

As we've reported throughout the year, the past year or so has been an utter disaster at Nissan. The automaker is dealing with the fallout from an international scandal at the top ranks, declining sales in the U.S. and China, a fraying relationship with alliance partner Renault and other problems that are too numerous to list here.

So 2020 was supposed to be a turnaround year with a new CEO and senior leadership team. Then coronavirus happened. Here's The Wall Street Journal with some details on how Nissan and Renault are hoping to weather this disaster, emphasis mine: 

Nissan and Renault executives say they plan to end products and businesses that show little hope of becoming profitable. That means Nissan is expected to wind down plants in Spain, and Renault will likely pull its namesake brand out of China, according to people familiar with the plans. Research and engineering work will be divided up to avoid duplication.

Billions of dollars in savings are planned, in part by more than doubling the proportion of parts the two companies share to 75% to 80%. “All of us, we’re not satisfied at all about the valuation of our company in the market,” Renault’s Mr. Senard said. “We’re determined to get out of that situation.”

Mr. Senard said he believed Renault could weather a downturn, and analysts agree neither company is in immediate danger of running out of cash.

Renault is taking advantage of the French government’s expansion of benefits by paying some white-collar staff in the Paris region for half a day’s work, while the government pays unemployment benefits for the other half-day. It has access to state-backed loans in France and a €3.5 billion ($3.8 billion) credit line it has yet to tap. Nissan has untapped credit lines of about $12 billion.

Expect a lot more French in your next Japanese car, and vice versa, I guess.

Anyway, this is going to be a hard year for every automaker, but especially these two. “The situation is quite clear: We’re not getting any revenues because we’re not selling anything,” said Renault chairman Jean-Dominique Senard. 

But for those who are buying cars right now, the plan seems to be to finance them for a long, long time. People are taking advantage of the super-low (or zero) interest rates available right now and going in for the lowest payments possible, which usually means six or more years of financing. 

Here's Car and Driver:

Loan lengths for new-car purchases have been relentlessly charging forward, getting longer with each month. And now in March, according to research from Edmunds, the average loan term hit 70.6 [months]—nearly six years—the longest on record.

Just as the loan length increased, so did average monthly payments, which hit $573. Back in October, the average loan length was 69 months, and monthly payments then averaged $550. The price of a new car has been consistently climbing, and as of April of last year had climbed 29 percent over a decade earlier.

Beginning in the middle of last month, automakers began rolling out zero percent interest for loans up to 84 months for buyers with top-tier credit history. Nonetheless, according to Jessica Caldwell, the executive director of insights at Edmunds, said in a statement that not many buyers got to take advantage of such offers.

This is a bad idea. Don't get locked into a forever loan.

Virus puts stores in ‘survival mode' (Automotive News) 

GM snubbed by White House in column about ventilator production (Detroit Free Press)

Zoox, citing COVID-19 shutdown, lays off its autonomous vehicle backup drivers (The Verge)

How to Actually Use the Defense Production Act (The Atlantic)

New Yorkers, Once Again at Ground Zero, in Their Own Words (Wired) 

Carbon emissions are falling sharply due to coronavirus. But not for long. (National Geographic) 

What's the longest car loan you've had?