How Covid – 19 has impacted car sales?
Covid 19 has certainly proved to be a disaster for humankind and has impacted quite all the industries in this modern era quite adversely. The automotive industry is no exception from the disastrous effects of covid 19. Talking about the facts and figures when it comes to the total number of sales of automotive vehicles worldwide during the pandemic, the accumulative figure of the total number of car sales was 45.58 million this year. This shows a significant drop in the sales of the car as compared to previous years. Countries that are majorly affected by the pandemic such as Western Europe and Southeast Asia have a more declining rate when it comes to sales in the automobile industry as compared to the countries that have successfully suppressed the infectious disease such as South Korea and China.
Talking about the sales drop of Renault – Nissan, the declining ratio of the sales is about 29% whereas the declining ratio of sales when it comes to BMW, Hyundai/Kia, and Daimler is 20% on average. The production volume has also get affected along with the sales volumes due to the closure of manufacturing plants due to the immense widespread of the disease resulting in imposed lockdown by the government. Strict preventive lockdowns have stopped the production of automobiles from happening within these regions. Studies have shown that the production rate within South Korea and Japan has reduced to half in May. In the United States and Europe, due to the rapid increase in covid 19 cases due to which complete lockdowns were imposed for the long term, General Motors and Volkswagen have completely closed their manufacturing plants for about 1 to 2 months. Toyota has also taken actions and preventive measures to partially suspend the operation within their production lines and plants while considering the demand and supply of the vehicles in the market and the outbreak of covid 9 cases overall. As far as the impact on the profit ratio is concerned Nissan and Ford have suffered from a decline in the operating profit margin whereas Toyota and BMW have managed to keep up with operating profit margin at a low level with minimal damage.