London, May 11, 2020 (GLOBE NEWSWIRE) -- Novel Coronavirus (COVID-19) Pandemic emerged around the end of December 2019 at Wuhan, Hubei province, China. The pandemic is having a major impact on all aspects of industries, including automotive sector, with major manufacturers either totally shut down following the directives issued by local governments or are running with minimal staff at production units to keep their personnel safe.
Manufacturing units around the world have been shut down, footfall in showrooms have fallen sharply, and vehicle sales have taken a huge hit. For already struggling automotive industry, the global economic trade impact of COVID-19 pandemic on automotive industry is estimated to be around $ 5.7 billion with European Union the worst-hit region at $2.5 billion decline in automotive industry due to disruption in automotive supply chain amid reduction in supplies from China. Major automotive events across the globe are either being cancelled or postponed, notably 2020 Geneva motor show, Qatar Grand Prix, New York International Auto Show, and Australian Grand Prix. Major automotive players such as Fiat Chrysler Automobiles, Ford, PSA Group, Volkswagen Group factories in Europe, Ducati, Tesla factory in California, BMW group European factories, Rolls-Royce, General Motors are among the global automotive manufacturers who have suspended their production due to Coronavirus (COVID-19) pandemic.
We, at Meticulous Research® estimate that the current crisis will severely affect the global automotive industry resulting in a 12%–15% dip in market in 2020. The supply chain of automotive manufacturers is spread across the globe, which is one of the major contributors to this market dip. At the start of the outbreak, the supply of auto parts from China stopped, as over 300 automotive parts suppliers outside Hubei stopped production. Now, although they have resumed production at a reduced level, there is a dearth of orders from manufacturers in other regions and logistics problems. With the shift of epicenter of Coronavirus disease (COVID-19) outbreak from China to Europe & the U.S., its impact on automotive sector will take extended time to correct.
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European Union
The automotive industry in Europe employs 2.6 million people in direct automotive manufacturing; of which approximately 1.1 million jobs have been affected due to Coronavirus (COVID-19) outbreak. The region has reported production loss of 1,231,038 units due to lockdown enforced by governments and various manufacturing units across the region to safeguard their employees’ health and contain the spread of virus.
Germany and Spain have reported the highest production loss in automotive since the outbreak of the pandemic in Europe. The economic trade impact of the lost automotive production for the European Union is estimated to be around $2.54 billion. The downturn in productivity, followed by a disruption in automotive supply chain and lockdown of manufacturing units, has severely impacted the new-car demand, supply, and registrations. New car registration in big 5 European markets have taken a hit with Germany, Italy, Spain, UK, and France reporting a decline of 11%, 9%, 6%, 3%, and 3%, respectively.
Various measures have been announced by the European Union to support the automotive industry with European Central Bank announcing Pandemic Emergency Purchase Program to purchase sovereign bonds and commercial papers from member states and commercial companies to infuse €750 billion and maintain liquidity in the financial system. ECB has relaxed its norms and expressed willingness to increase its size of asset purchase for as long as needed. European Investment Bank has proposed plans to mobilize €40 billion of funds and asset-backed securities purchase program to mobilize another €10 billion of support to the industries.
Since the epicenter of the pandemic has shifted from China and is at its highest severity in Europe with thousands of new cases being reported daily from countries like Italy and Spain, it would be difficult for auto manufacturers to resume production in Europe soon. Although contingency plans are in place and financial institutions have proposed relief plans for the industry, we do not anticipate any bailout strategies from automobile companies in action until Q4 2020.
Read the full article here to know the impact of COVID-19 (Coronavirus) on automotive industry in different regions- https://www.meticulousresearch.com/covid-19-article/automotive-industry-amid-global-covid-19-crisis
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