Auto Service World
News   December 20, 2020   by Auto Service World Staff

Impact of the Covid-19 Crisis on the Automotive Industry

As we know by now, the ongoing Covid-19 pandemic is far more than a global health crisis. The ongoing Covid-19 pandemic has affected and is still affecting economies and societies across the globe.

While the Covid-19 impact varies from one country to another, on a global scale, it increases inequalities and poverty.

Assessing the impact of the ongoing pandemic and crisis on economies and societies is one of the most fundamental steps towards tailoring the adequate response that will help different societies recover from the growing crisis.

Eurostat’s report on the annual growth rate of inflation shows that in the European Union, inflation rates stood around 4.4% back in October this year. Another report published by OECD shows that almost every global industry was negatively affected by the Covid-19 crisis.

According to the same report, the global economic recovery will continue in the following year. The latest projections show that global Gross Domestic Product rose by 5.6% this year and it is expected to increase by around 4.5% the following year.

Industries Most and Least Impacted by the Covid-19 Crisis

At the start of 2020, the airline industry suffered the most due to the coronavirus pandemic. In 2021, the demand for air travel has increased, but many airlines were forced to fire hundreds of their employees to stay afloat.

Similar negative trends are noticed in the restaurant and land-based casino industry. When it comes to the global iGaming industry, it was not overly negatively affected by the pandemic.

For instance, the Canadian mobile casino and entire gambling sector in the country generated over US$12,75 billion in 2020. According to one Statista report, the Canadian gambling sector will be valued at US$12,54 billion by the end of 2021.

When discussing industries that were most affected by the Covid-19 crisis, the automotive industry and leisure facilities claim the top spot.

In other words, the Covid-19 crisis has had a major, severe impact on the global automotive industry fueled by disruption in parts exports, major manufacturing interruptions in Europe, and closures of US assembly plants.

The Automotive Industry During and After the Covid-19 Pandemic

The automotive industry was suffering financially even before the world was struck by the Covid-19 pandemic. Needless to say, the Covid-19 crisis has had a major negative impact on the industry.

Between March and May 2020, the first lockdowns were ordered and this led to major production blocks in most countries. Sales in the automotive industry dropped by around 15%. The major drop in sales recorded at the beginning of 2020 continued through the entire year.

There was also a significant fall in new vehicles sales and production. Many production plants in the United States and China closed at the beginning of 2020.

In 2020, around seventy-eight million vehicles were produced in the world. This represented a fall of 16% when compared to the total number produced back in 2019. This is the biggest fall in vehicle production in the world.

China, Germany, and Japan were the major vehicle producers back in 2020 with China claiming the top spot. In 2020, Chinese vehicle production plans produced over twenty-one million vehicles.

Fortunately, 2022 already looks brighter with most markets and industries in the world preparing for a partial or full recovery. According to the latest projections, a decrease in sales of around 13% is expected in the months to come.

While negative trends will most likely continue, forecasts are still positive. According to most reports, the automotive industry’s value will increase by around nine trillion dollars in eight years from now. This growth will be mostly generated by new vehicles.

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