Brazil auto sector braces for massive shutdown due to coronavirus

Sao Palo — The Brazilian automotive sector is preparing to stop activities over the next few weeks due to the economic crisis generated by the coronavirus, Brazil's National Association of Motor Vehicle Manufacturers, Anfavea, said Friday.

In addition to the 65 factories for automobiles, light commercial vehicles, trucks, buses, agricultural machinery and engines, which employ 125,000 workers in 43 cities in Brazil, the measure should also hit auto parts suppliers -- with some already announcing temporary halts and financial issues.

At least Volkswagen, Volvo, General Motors, Mercedes-Benz, Ford and Toyota have already announced plans to suspend operations and give collective vacations to their almost total 50,000 workers.

Volkswagen has announced it will suspend activities from all its plants in the country starting March 23 for three weeks, while Volvo said its employees will be away from their activities for four weeks, starting March 30.

GM's five plants will be halted from March 30 to April 12, while Mercedes-Benz will shut down from March 30 to April 21 and Toyota will halt activities from March 23 to April 6.

Ford will suspend operations at its three plants in Brazil from March 23, with restart planned for April 13, and is also suspending operations at its plant in Argentina, from March 25 to April 6.

"This action aims specially to keep employees safe and help limit the spread of the virus, as well to adjust the production volumes to the lower consumer demand due to this unprecedented situation," Ford said in a statement.

The shutdown of the automotive sector in Brazil is expected to strongly impact steel consumption and scrap generation, thus deferring the long-awaited "turning point" of the economy and of the national metals market, sources said.