Fortified balance sheets essential for auto industry’s coronavirus survival

Automotive companies are tapping liquidity, protecting cash reserves and battening down the financial hatches as survival mode kicks in, writes Megan Lampinen

Automotive World Magazine – May 2020

The novel coronavirus has paralysed much of the world’s automotive industry, sending automakers and suppliers scrambling to bolster their balance sheets and shore up enough of a cash cushion to see them through the worst of the crisis. Sales are all but paralysed and production is halted—and that can be financially devastating. AlixPartners estimates that every 1-million-unit reduction in vehicle sales hits takes €5bn (US$5.5bn) out of automaker cash flow. Given the scope of the potential downturn, the impact could be huge….

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