Mexico and Brazil witness 99% fall in automobile manufacturing; certain plants to reopen

Mexico and Brazil witnessed a 99% fall in auto production in April, with a total of just more than 5569 vehicles being manufactured in both the Latin countries combined. Luiz Carlos Moraes, the President of Brazil's automakers stated that the situation was "difficult and dramatic."

READ: IMF Chief: Worst Crisis Since The Great Depression

Unprecedented fall in manufacturing 

"Carmakers have spontaneously decided to stop production in April to adapt to the new scenario,” Moraes added. 

Mexico has lost about 500,000 jobs because of the pandemic lockdown, and small store owners wrote a public letter to López Obrador on Wednesday complaining they can't get stocks of basic supplies because hundreds of towns in Mexico have closed themselves off for fear of contagion.

In late March, the U.S. government launched a campaign to get Mexico to reopen assembly plants, suggesting the supply chain of the North American free trade zone could be permanently affected if they didn’t resume production. Mexico has said it is working on a joint plan with the U.S. and Canada to reopen factories, especially auto plants.

READ: World Economy Bound To Suffer 'severe Recession': IMF

In order to revive the firms and the industry, certain automobile manufacturers have decided to reopen their plants. Volkswagen de Mexico said late Thursday it is planning to reopen its assembly plant in Puebla state and its engine factory in Guanajuato state on June 1.

General Motors said it hadn’t fixed “an exact date” for reopening its plant, also in the Guanajuato city of Silao, but some workers there reported getting notices to report for work on May 18.

Toyota, Nissan and Ford did not immediately respond to requests for comment on possible re-openings of their plants in Mexico.

READ:Global Fiscal Measures, Liquidity Injections Near USD 14 Trillion, Says IMF

Earlier this week, International Monetary Fund (IMF)'s Managing Director  Kristalina Georgieva said states that the economimc impact of the virus is going to be worse than the great depression. Speaking to UK broadcaster ITN, Georgieva said: "Normally in a crisis, we will boost spending. Now we are telling people, don't go out, don't spend."However, Georgieva claimed world powers should focus on supporting their health systems, help businesses and households to sustain through lockdown with 'massive fiscal injection', and plan for the future of their economies. The IMF chief also indicated that funds may be provided for various struggling economies, and that certain country's debts to the fund may be written off, but only after "very careful assessment on a country by country by country basis."

READ: IMF: COVID-19 Pandemic To Stop Asia's Growth In 2020 For First Time In 60 Years