COVID-19’s Impact on the Automotive Industry

At the time of writing, countries around the world are still battling the devastating coronavirus outbreak. Some are faring better than others, some are seeing infection rates fall, whilst some are enduring skyrocketing infection numbers as the feared second wave begins to emerge. The COVID-19 epidemic has severely impacted every single industry in the world, and in this article, The Windscreen Company is going to look at how coronavirus has affected the automotive industry.

Slower production

For the industry, one of the most arresting statistics to arise from the COVID-19 outbreak is that automotive demand decreased by 95% in April. Lower demand means that manufacturing plants and the staff are, by and large, not required, which in turn may necessitate redundancies.

Where factories are in use, important COVID-19-related safety measures are having an impact on the production lines. Staff need to practice social distancing, which means the usual rapid-fire pace of the line will be slowed, and PPE might also hamper the typical speed and efficiency of staff. Measures like PPE and social distancing are crucial for preventing the spread of the disease, and a slower production line is an unfortunate but necessary consequence of said measures.

Factory repurposing

Many vehicle manufacturing plants are being repurposed to help produce COVID-19 supplies, including PPE for medical staff and the public alike. While this measure is a temporary one, it remains to be seen just how long ‘temporary’ is, and so there could be a long wait until factories return to their original operations. For the time being, the capacity for manufacturing vehicles and their components is significantly decreased across various brands, so fewer cars are being built.

Car dealerships

Much like other retail environments, car dealerships have either seen a huge decline in footfall or have had to temporarily close. This obviously impacts revenue, which in turn can impact payroll, leading to the worst-case scenario as businesses have to let staff go. Many businesses have taken advantage of the furlough scheme, though, so jobs have been saved.

In any case, dealerships all over the world have been hit in the pocket as people look to save money in this time of incredible uncertainty – as a car is such a significant purchase, people are reluctant to shell out thousands of pounds with little to no idea of what the immediate future may hold.

International sales

As manufacturers are hit directly in the finances by the pandemic, the need for careful allocation of capital is stronger than ever. It’s thought that manufacturers may slow or even cease sales in certain countries, instead choosing to focus on the markets that are most profitable for them.

Virtual launches

Previously, the launch of a new flagship vehicle was met with much fanfare; events like the Geneva Motor Show allowed customers, partners and investors to see the new vehicle in the ‘flesh’, discuss it with representatives of the manufacturer and maybe even register their interest in purchasing said vehicle for when it comes on sale. Of course, large gatherings in enclosed spaces are now either illegal or strongly ill-advised, and as such, car launches may be turning virtual.

McLaren were one of the first to take on a virtual car launch, using Instagram Live to launch their new 765LT. It remains to be seen whether or not virtual car launches will become the norm even after our return to normal life – whilst there are certainly many benefits to manufacturers attending ‘real’ car launches and shows, going virtual can save them a lot of money. As brands look to recoup the heavy losses caused by COVID-19, they may decide to avoid spending big on physical motor shows for a while.

Future habits

Private over public

At the moment, lots of people are avoiding public transport, either because they’re not commuting at the moment or they’re concerned about sharing a space with others in the current climate. Some experts think this trend may continue after COVID-19 has passed, which could lead to increased car usage and therefore higher vehicle sales.

On the flip side, as economic uncertainty continues, and the impact on the job market is felt long after the pandemic is defeated – whenever that may be – it’s difficult to predict when people will be comfortable making a significant purchase, such as a car. While many may want to take private transportation in future, the financial aspect of that decision requires a certain amount of security with regards to people’s economic standings.

Struggling brands

Of course, one of the most significant business ramifications for car manufacturers is that some are likely to go out of business. Not every car manufacturer’s bank account was bursting at the seams before the pandemic started, and those that were struggling for cash are likely to find themselves in serious trouble as a result of the economic downturn. While the major brands will survive, some national car makers might not emerge on the other side, whenever the other side comes round.

Like every industry and almost every business in the world, the automotive sector has been rocked by the most widely-felt global event for some time. Despite the vast riches of some companies, and the billions of pounds in vehicle sales year-on-year, it’s going to take some time for the industry to find its feet again and return to pre-pandemic levels. The true extent of the pandemic and the effects it will have on the motor industry is not clear at the moment, but the sooner a clearer picture emerges, the sooner plans can be made to regain control.

The Windscreen Company are leading providers of windscreen repair and replacement for vehicles of all types across Ipswich, Essex and the South East. Whether you need a replacement windscreen for the vehicle on your drive or chip repair at the roadside, we’re available 24/7 to get you back on the road. For more information, contact us today and we’ll be happy to help.

This page was last updated on: 05.11.2020

The Windscreen Company

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The Windscreen Company, has over 20 years of experience in windscreen repair and replacement. Since 1998, they have been at the forefront of industry innovation, leveraging the latest technology to ensure customer safety and satisfaction.

The Windscreen Company's, help-and-advice pages offer valuable tips and guidance on maintaining vehicle safety through quality windscreen care, while also featuring updated industry realted content.