The outbreak of the coronavirus sees global car sales drop drastically with lockdowns halting productions and keeping customers away from showrooms.
The impact of the coronavirus or COVID-19 pandemic has brought life as we know it to a grinding halt, and auto industries around the world haven’t been spared either. Since the auto industry is such a labour-intensive industry, there was no other option but to shut factories down with a highly contagious and deadly virus on the loose. While this pragmatism is both necessary and well-received it has left the world’s carmakers in a difficult situation. This precarious position has been compounded by the fact that global components trade has also been affected, especially since China is a major player in the auto components industry, and supplies parts to most major automakers on every continent.
According to a recent report by IHS Markit on Coronavirus and global car sales, the numbers for car sales are expected to fall by 12% for the year 2020 across the world, with the loss translating to 10 million units less sold across the earth when compared to 2019 figures. For context, even the global recession of 2008-2009 only saw an 8% drop in sales as per the same report.
The Coronavirus has impacted the Indian automotive space as well. As per a release from the Federation of Automobile Dealers Associations (FADA), as of 17 March 2020, counter sales had fallen by 60-70%. That is a drastic number and has been reflected in the March year-on-year sales figures as well. AS per industry numbers, the company with that’s been least impacted – Hyundai – has seen a 41% drop as compared to March of last year. Toyota were next in line with a 45% drop, followed by Maruti Suzuki with a 47% decrease and Renault who saw a 54% reduction in sales. Ford came in next with a 58% downturn followed by Tata and Škoda who both posted 68% drops in year-on-year sales for the month of March, and Nissan who clocked a 72% decline. The manufacturers that took the biggest hit were Honda with a 79% decrease, Mahindra, whose numbers fell by 88%, FCA with an 89% reduction and Volkswagen, who were hit the hardest, with a staggering 95% fall in sales figures.
Rajan Wadhera, President, SIAM, provided some context of what that this Coronavirus closedown has resulted in for the Indian auto industry, saying, “As per quick estimates by SIAM, it is expected that Plant closure of Auto OEMs and Components will lead to loss of more than Rs 2,300 crores in turnover for each day of closure.”
The road to recovery will be a long and hard one, especially since the timing of the BS6 norms kicking in has coincided with the pandemic to wreak even more havoc on the industry. Let’s hope that Coronavirus is brought under control soon so that auto industry both here and everywhere else in the world can be brought back to a more even keel.
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