{"id":156912,"date":"2020-12-10T15:43:15","date_gmt":"2020-12-10T20:43:15","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=156912"},"modified":"2020-12-10T15:43:15","modified_gmt":"2020-12-10T20:43:15","slug":"despite-remarkable-rebound-auto-industry-faces-many-challenges-in-2021","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2020\/12\/despite-remarkable-rebound-auto-industry-faces-many-challenges-in-2021\/","title":{"rendered":"Despite \u201cRemarkable\u201d Rebound, Auto Industry Faces Many Challenges in 2021"},"content":{"rendered":"
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Vigorous protocols have helped protect auto workers, but have also reduced factory productivity.<\/figcaption><\/figure>\n

As the COVID crisis struck last spring, auto industry analyst began laying out dire forecasts calling for sales to plunge to Great Recession levels, sending suppliers, and perhaps even some major automakers racing towards bankruptcy. If anything, the industry has staged what one veteran has dubbed a \u201cremarkable\u201d recovery, sales bouncing back to the point where manufacturers can barely keep up with demand.<\/p>\n

While the \u201cV-shaped\u201d recovery is expected to continue in 2021, the ongoing pandemic still raises plenty of uncertainties, according to a group of industry insiders who participated in a year-end summit sponsored by the Society of Automotive Analysts on Thursday. Among other things, these include both rising labor costs and labor shortages, strains on margins and earnings, and the need for the industry to handle the hefty cost for the growing shift to electric, as well as autonomous vehicles.<\/p>\n

\u201cI would characterize 2020 as remarkable,\u201d said Steve Wybo, senior managing director with Conway MacKenzie, a Michigan-based finance company that works with numerous automotive suppliers.<\/p>\n

(Pandemic forces changes across the auto industry.)<\/strong><\/span><\/em><\/a><\/p>\n

\"\"<\/a>As recently as early summer, research firms like J.D. Power were forecasting U.S. sales for the year would tumble by 3.5 million compared to pre-pandemic estimates. In recent months, volume has rebounded sharply, at times exceeding prior-year levels. For all of 2020, the consensus is that volume will come in 14.3 million, or just 2.5 million below original forecasts.<\/p>\n

Wybo sees the V-shaped recovery continuing over the next several years, with 2023 coming in around 16.2 million sales, or 0.5 million short of pre-COVID forecasts.<\/p>\n

That said, the recovery is still likely to be a \u201ctruncated \u2018V,\u2019\u201d cautioned FT Chong, director of PineBridge Investments, which works with an array of mid-level automotive suppliers.<\/p>\n

Not only will it take the industry through mid-decade to fully recover \u2013 barring any further COVID problems \u2013 but the near-term industry is going to face plenty of challenges, Chung emphasized.<\/p>\n

Perhaps the biggest problem is that manufacturers and suppliers alike are facing a surge of rising costs, the panel agreed:<\/p>\n