11 Jan COVID19 – Automotive industry recovery
2020 was an exceptional year. Worldwide, about 75 million people became infected with COVID19 last year. Officially, more than 1.5 million patients have died from or with the new coronavirus. And now, in early 2021, it’s frustrating, it’s really hitting the fan again. A consistently high number of new COVID19 infections despite lockdown, different virus variants, vaccine supply problems, and extended or tightened lockdown measures across Europe are taking a toll on us humanly. But our health is the most important thing. Now we have to pinch our cheeks and hold out until we emerge from the current and so far most critical pandemic phase.
Hopefully, this will happen in the course of the second quarter, when rising outdoor temperatures slow down the spread of the disease and a sufficient vaccination coverage rate ensures that the situation will ease by late summer. However, there are still several months to go, and we must now work together to complete the marathon of measures with stamina. Let's protect ourselves and our society!
Economically, Europe was already in a dilemma before the COVID19 outbreak. The automotive industry, one of our key sectors in Europe, marched into a correction in the second half of 2018 after an 8-year upward trend, leading to a unit decline in 2019. A further decline was forecast for 2020, when the outbreak of the COVID19 pandemic dramatically pushed down already weak numbers. The bottom line is that 2020 unit sales will be at least 20% below last year’s levels, probably a bit lower. Final figures are not yet available. There are major uncertainties in the forecasts for the coming years, as no one can estimate when we will get the pandemic under control. And then, of course, there were the uncertainties among buyers due to the e-mobility transformation, which already caused a weakness in demand before COVID19.
Those uncertainties are still there. In any case, according to research, the unit sales level of 2018 is not expected to return until 2023 at the earliest (see chart). This means that the pie of supplies and new investments will be much smaller in the future and the market will be extremely competitive in the next few years.