The impact of COVID-19 on the automotive industry

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The onset of the Covid 19 pandemic caused financial shockwaves globally. The automotive industry is feeling the impact with the closure of some assembly plants caused by large scale manufacturing interruptions during national lockdowns across the globe.

The automotive and HGV vehicle manufacturers witnessed a slump in sales during the initial weeks of the first round of lockdowns earlier this year. However, normalization occurred over the summer months, and demand for commercial vehicles and leasing arrangements exceeded expectations.

So far, there has been some impact as orders in the first quarter were postponed or canceled. However, as lockdowns were lifted, there was a surge in demand in waste vehicles as furloughed workers and home workers renovated their home and garden spaces.

Current Guidelines

Many commercial vehicles are involved in logistics work categorized as ‘essential services,’ and of course, international and domestic freight is also considered an essential service. The automotive industry continues to see demand driven by households’ needs as domestic and commercial waste is collected and food and consumer goods are delivered.

Truck providers, drivers, and mechanics have been able to quickly adapt to new guidelines, adhering to automotive health and safety best practices at every step of the way.

Future Outlook

Across the EU, the commercial, automotive industry saw a 67% fall in sales through April. Light commercial vehicles took the largest hit, with an 86% fall in sales, while sales in HGVs over 16 tonnes dropped by 80% in the UK.

The outlook for the year reflects the lower demand in freight due to lower industrial production. Market demand is expected to decline, and sales are projected to be down by roughly 20% to 30% compared to last year. However, the automotive industry will benefit from more online shopping as consumers adjust to a new way of life, spurred on by the November lockdown.

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