Empty car showroom during lockdown

The impact of COVID-19 on the global car market

Since life as we know it came to a sudden halt, we have been looking at the profound impact COVID-19 has had across the globe.

The effects have been felt across thousands of industries, with millions of companies facing loss of staff, business and profit.

The automotive industry has felt the impact of the global pandemic severely. Production, manufacturing and sales of vehicles have all come to a sudden stop, not only in the UK, but across Europe and the rest of the world.

Motorsport events have been cancelled and the stock market has fallen dramatically.

So, what exactly does this mean and what can we expect moving forward? The team at Scrap Car Comparison have looked into the impacts of Coronavirus on the automotive industry and car retail market and outline below.

Effects of Coronavirus on the automotive industry

Throughout the UK and across Europe, over 13.8 million people work in the automotive industry. From design and production to maintenance and retail, roughly 6.1% of UK and European jobs are based within the automotive sector.

Lockdown forced the industry to come to a temporary standstill. There is currently a projected loss of 2,446,344 vehicles across Europe, including the production of cars, vans, trucks, buses and coaches.

As the production of vehicles came to an abrupt stop, this had a knock-on effect to the car sales market.

Most cars still find their way to their owner through some sort of dealership. If showrooms are closed, it blocks the flow of production to the manufacturer, grinding the process to a halt.

The closure of car showroooms during lockdown

The closure of showrooms has impacted sales figures massively:

  • April 2020 saw a drop of 97.3% in car sales, a figure not seen since 1946, a year after World War Two.
  • Only 197 cars were produced by British factories in April and only 4,321 cars were sold, compared to 161,064 cars sold in Britain in April 2019.

Take a look below to see the impact the lockdown has had throughout Europe:

CountryProduction lossClosure (days)
Germany616,59130
Spain452,15534
France278,42534
United Kingdom262,71541
Italy157,93341
Czech Republic155,06029
Hungary51,55222
Portugal41,52535
Belgium33,36025
Netherlands30,81925
Austria26,48034
Sweden23,46415
Finland11,60425

What has the automotive industry done?

The automotive industry has played its part in helping to fight the virus, coming together to build critical medical equipment such as ventilators and donating protective clothing such as gloves, face masks and goggles.

Many vehicles have been loaned to the frontline and key workers to ensure they can safely get to work while public transport has been reduced. Vehicles have also been donated to the Red Cross, alongside various pharmacies and supermarkets to ensure that essential medicine and food can continue to be delivered.

Alongside donations, many companies have released full-time employees with medical backgrounds from their day-to-day tasks to volunteer and work alongside the public health services.

Many automotive companies have thanked those on the NHS frontline and to key workers up and down the UK, by offering little perks and extras:

  • Vauxhall have made their roadside breakdown service free to all key workers who drive a Vauxhall.
  • Ford is offering key workers priority service to its mobile service operation.
  • Buyacar is offering a free delivery and warranty service to all key workers.
  • Europcar are offering cars from just £12 a day to all emergency and key workers.

What can we expect moving forward?

Factories, garages and showrooms have all started to slowly reopen as business slowly starts to resume.

Restrictions are in place to maintain the safety of all staff and customers, including social distancing, limiting the number of people allowed in one space, protective masks and screens and contactless payment systems. We expect to see these measures to be in place for the foreseeable future.

Motorsport and COVID-19

It’s not yet known when motorsport events face uncertainty will be able to resume. In the UK, Motorsport UK (who govern all four-wheeled motorsport across the country) has suspended all events until at least the end of June.

The 2020 F1 season is on hold, with reports that the first race will not take place until at least early July. Wales Rally GB has cancelled all events for 2020.

As life beyond the pandemic slowly becomes clearer, we hope to see motorsport tyres on tracks in the next few months!

Car and fuel prices

We expect prices for automotive goods, including fuel prices, to fall slightly due to the fluctuating stock market and the price of oil reaching an all-time low in the US.

It’s a very real possibility that the UK could be facing a steep recession, which would ultimately have a knock on effect to every industry, including the automotive.

An impact analysis done by the Society of Motor Manufacturers and Traders (SMMT) suggests that new car sales will fall 25% this year, and as many as 200,000 vehicles could be wiped out from Britain’s 2020 output.

Whatever happens as we continue to move forward from the COVID-19 pandemic, Scrap Car Comparison will be here to help you part with your old, unwanted or damaged vehicle.

Find out more about scrapping your vehicle during lockdown or fill out your details here and get an instant quote today!

 Sources:
ACEA, BBC News, Telegraph, Autocar,
Buyacar, Carbuyer, Motorsportmagazine.

 
 

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