|Status : Published||Published On : Jan, 2023||Report Code : VRAT4076||Industry : Automotive & Transportation||Available Format :||Page : 181|
Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus. In December 2019, Wuhan Municipal Health Commission, China, reported a cluster of cases of pneumonia in Wuhan, Hubei Province. A novel coronavirus was eventually identified. As of April 25, there were 2.9 million cases of coronavirus worldwide resulting in deaths of more than 200K people globally. IMF predicted positive economic growth for more than 160 countries globally four months ago; however, now IMF anticipates that economies of more than 170 countries will shrink or witness negative growth in 2020 following COVID-19 outbreak.
The COVID-19 outbreak has negatively affected many industries including automotive industry. The global economy has been largely affected by the growth in the automotive sector. The sector employs more than 9 million people alone in manufacturing of automobiles globally, which includes over 5% of the global manufacturing workforce. Many other industries including steel, iron, glass, plastics, textile, rubber, software among others are dependent on the demand from automotive sector.
Globally, automotive sector was already witnessed downturn during 2019, and the COVID-19 made it more difficult for industry to recover. It is estimated that global automobile sales will decline about 23% in 2020. Initially the disruption in supply and manufacturing hampered the industry significantly and now with the multifold decline in demand has led to the uncertainty regarding the recovery.
According to the Society of India Automobile Manufacturers (SIAM), passenger vehicle sales declined 51% to 143,014 units in March 2020 in India. Also, sales of commercial vehicles declined 88% to 13,027 units, those of two-wheelers fell 40% to 866,849 units. The COVID outbreak has crashed the automotive industry tremendously. U.S. is anticipated to witness a decline of 27% in automobile sales in 2020.
Different automakers have reported sharp decline in their sales and in the production owing to the COVID-19. Fiat Chrysler reported that its first-quarter sales in the U.S. fell by 10% even though sales were up the first two months of the quarter. Similarly, General Motors reported 7% decline in its sales in the first quarter due to the COVID-19. IN U.S., Honda reported 19% decline in first quarter, whereas Hyundai reported 11%.
Different governments across the globe are taking initiatives to support automotive industry amid COVID-19 outbreak. Although sector specific initiatives as awaited, several measures are being taken to revive the economic downturn. As of now government measures have been announced to economic securities for its citizens and industry. According to the IMF, an estimated USD 2.3 trillion (around 11% of GDP) Coronavirus Aid, Relief and Economy Security Act (“CARES Act”) is announced in the USA. The Act includes:
The global financial meltdown started in December 2007 and a step decline was witnessed till September 2008. From 53 million units of car produced, globally in 2007 to 47 million units of car produced in 2009, the industry witnessed major decline in revenue. IN the US alone the production of automobiles slashed by approximately 2.5 million units with production of 12.9 million units in 2008 as compared to 15.4 million units in 2007.
Japan, Western Europe and North America was the most hit by the financial crisis. In 2008, the car sales in Western Europe, Japan and North America witnessed y-o-y decline of 8.4%, 4%, AND 15.3%.
The Report Offers: