Article

Mexico: The New COVID-19 Focus for Manufacturers

The impact of the COVID-19 virus on the global Automotive industry has been extensive and it will only get more complicated as time passes.  While most of the world has initiated lockdowns across their countries, Mexico has not, yet. Using the virus growth rate and the past behaviors of Asia, Europe, and North America in managing their respective lockdowns as a guide, we suggest the following as a guide for planning your material deliveries. 

Total Reported COVID cases 0331

The chart above shows the case growth and case total to date when the lockdowns began in each country. In some instances, the lockdown had a series of phased steps and the points represent the approximate time a stay at home order was initiated.

Hubei COVID Rate of Cases 0331

Using the Hubei data, the China lockdown began when the case total was roughly 400. Approximately 35 days from the lockdown, the case rate had slowed to less than 1% per day and some of the restrictions began to be relaxed. The entry into and exit from, the lockdown is phased, and the timing shown is approximate. The case rate increase for the other regions is shown below.

Europe COVID Lockdowns 0331

Europe reacted when the case total was in the thousands and will take between 65-70 days to reach that rate. The US reacted when the total was in tens of thousands and it might take at least 75-80 to reach a similar value. It is early in the process and the projection may change as the data matures.

If other countries use the same 1% per day threshold, the chart below would be a plausible estimate of the timing for the current and possible future lockdowns.

Mexico is past the 1000 case scenario.  It appears from the trends above that the earlier the intervention, the shorter the time necessary to lower the rate of increase.  Mexico is probably past the point for a recovery window similar to Asia and each day increases the probability of more draconian actions and longer lockdowns.

The next few days are extremely important for US and Canadian manufacturing.  All suppliers must take advantage of this time before the impending Mexican shutdown to build as much inventory as possible so they can re-start their plants when the virus is contained in their own country.  The projected lockdown times may be a good estimate for sizing your inventory bank.

COVID Estimated Lockdown

 

To learn more go to our COVID-19 dashboard.

 

Authors:

Jeff Jaisle jjaisle@seraph.com

Chris Trower ctrower@seraph.com

About Seraph: 

Seraph's team of operational managers and senior consultants intercede on our client's' behalf to fix a crisis that is putting the business at immediate risk, turnaround a situation that is damaging the bottom line or restructuring to improve the balance sheet. Seraph has successfully delivered projects in the following regions: The Americas, Europe, China, and India. Seraph's Industry Expertise Includes Aerospace, Automotive, Energy Infrastructure, Healthcare, and Medical Devices. Through our other operating companies, we are continually looking for distressed situations where we can put our expertise and capital to work to create value.

31 March 2020