Even as automotive manufacturers tentatively restart production lines after the COVID-19 crisis disruptions, the global automotive industry faces a hit to the market that will be greater than in the 2007/8 financial crisis, says GlobalData, a data and analytics company.
David Leggett, Automotive Editor at GlobalData, comments: “GlobalData’s base COVID-19 light vehicle sales scenario forecasts a fall of 18.9% on 2019 to 72.8 million. That is a bigger annual percentage drop to the global market than we saw during the last great recession.
“A decline of this magnitude will create structural change in the industry all along the automotive value chain – from parts suppliers to vehicle manufacturers and retailers.”
GlobalData estimates a revenue cost of $139bn to vehicle manufacturers as some 4.1 million units of production were lost in Europe and North America alone to the end of April.
Leggett continues: “We are seeing a recovery to the vehicle market underway in China and our projections are for a gradual recovery to other markets and for global sales from the third quarter of this year.
“There is, however, no avoiding the strongly adverse impact of lost sales on companies’ financial performances and cashflow during the worst of this crisis and its aftermath. The priority for many is simply to have enough cash to weather the worst of the storm and get through to the recovery phase, but sales will be below pre-crisis levels for some time to come.”