With much of the global automotive industry still affected by the coronavirus (COVID-19) pandemic lockdown, manufacturers are facing several more months of disruption in sales and as a consequence production. LMC Automotive, a leading automotive forecaster based in London, UK, has stated that it expects the sharp fall in vehicle sales in the first quarter of 2020 to bottom out in April in North America and Europe. China has already restarted production in most of its automotive plants.
LMC Automotive is projecting a fall of more than 20% in global light vehicle production to around 71 million units in 2020 as a result of the COVID-19 pandemic and ensuing recession. This steep decline is expected to cost global automakers around 19 million units in lost production and this would inevitably also impact component suppliers to the industry.
In the first quarter of 2020 sales of new cars in the European Union and EFTA declined by 27.1% to 2.764 million units with the impact of the COVID-19 crisis weighing most heavily on the March sales figures. Each of the major EU markets posted significant losses: Italy reported -35.5%; France reported -34.1%; Spain reported -31%; and UK reported -31%. Car production in Germany, Europe’s largest car market, fell by 21% in the first quarter to 1.017 million units. European demand for cars in 2020 has been downgraded to 15.6 million units, down by 13.6% over 2019. This represents a volume downgrade of 1.9 million units versus pre-coronavirus estimates.
In the USA, demand for light vehicles plummeted in March by 38.6% year-on-year with 982,953 units sold. First quarter sales were down overall by 11.9% at 3.512 million and Canada ended the quarter down 20.8% at 329,645 units.
China, which was among the first countries hit by COVID-19, saw the first quarter of 2020 vehicle production and sales volume reach 3.47 million (-45.2%) and 3.67 million units (- 42.4%), respectively from the previous year. China is the world’s largest car market and with the resumption of production in many car plants in April, the sector is expected to rebound in the second quarter although it is unlikely to achieve the levels of the same period in 2019. China expects an overall sales decline of 12% in 2020, according to LMC Automotive.
Japan’s automotive industry is the world’s third-largest and the sector ended the first quarter of 2020 better than expected with vehicles sales down 9.3% to 1.375 million. The one current bright spot on the global auto scene is Korea. The Korean Ministry of Trade, Industry and Energy recently announced that Korea’s automobile production and domestic vehicle sales in March increased by 6.8% (369,165 units), and 10.1% (172,956 units), respectively. This was after a 26.4% fall in total vehicle production in February to 189.235 units, which was attributable mainly to the shortage of auto parts from China and the temporary shutdown of production lines due to the spread COVID-19.