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Very Big US Auto – Very Big US Auto is one of the oldest and one of the largest manufacturers of autos in the US.  Very Big US Auto’s supply chain is highly dependent components manufactured in China and assembled in the US, (think back to our week 1 problem with the seat manufacturer).  The Chinese economy has rebounded quickly, much of the production capacity is still going to rebuild inventories, so the supply of components still lag behind demand so there is upward pressure on all of our costs.  Additionally manufacturing facilities like ours must take extra precaution to keep workers safe.  Costs are rising on all aspects of production across the industry.  On the demand side, Very Big US Auto knows that demand is relatively elastic with a price elasticity of demand of 1.2. But we also know that pandemic has made some transportation substitutes less acceptable.

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