The term "overcapacity"

Overcapacity is a state where a company produces more goods than the market can take. A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. This network includes different activities, people, entities, information, and resources. The supply chain also represents the steps it takes to get the product or service from its original state to the customer. Take China, for example. Because more than 80% of the world’s auto supply chain is connected to China, production shortfalls resulting from disruptions to the auto industry in China affect automakers across the globe. Similarly, if there's too much of something because made, more supply than demand, this leads to overcapacity. Overcapacity occurs when a sudden decrease in demand causes excess capacity. COVID-19 caused this to happen with the automotive industry, because it lead to less cars being sold in 2020.