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What effect did Covid-19 have on car sales in 2020?

February 17, 2021

It’s fair to say that at some point over this past year we’ve all been effect by Covid-19, one way or another. One thing that we do know for sure, is that car sales have definitely been hit hard, but that is to be expected, right?

Manufacturing units around the world have been shut down, showrooms have seen a dramatic decrease in numbers and vehicle sales have taken a massive hit. Perhaps the decision to buy a car just doesn’t seem logical right now?

According to SMMT, over 920,000 cars were built in the UK in 2020, but even still, car exports were down by 29.1%. This is a crisis that has severely affected the global automotive industry from the start. Back when the outbreak first began, the supply of auto parts from China stopped, because the automotive suppliers had stopped production. Although this has resumed now at a reduced level, there are still logistic problems.

The current crisis has affected the automotive industry quite significantly, so much so that it will take an extended amount of time for this to be corrected. If we take a look at the employment figures, we can see just how the pandemic has hit the automotive industry and how this has had a knock-on effect on people’s lives too, quite dramatically to say the least.

In Europe, at least 2.6 million people are involved in car manufacturing and around 1.1 million of these jobs have been affected due to the pandemic. This is huge, but it’s likely that the industry will continue to take a hit until we’re safely out the woods in terms of Covid-19. Many of the big guys, like Honda and Toyota, anticipated that there would be a huge drop in sales during these difficult times, with some of these factories even swapping to produce medical equipment!

Moving forwards, the auto industry will receive a share of a Government stimulus package, helping to stabilize it as sales rebound, which sounds really encouraging. And even when car dealerships are back to normal and open again, it’s likely that most people will continue to look and potentially buy a car online, given that digital sales channels are no longer something that we can live without. It’s no surprise really, seen as though social distancing has changed our lives forever, and that the majority of people now want to buy a car with as little personal contact as possible.

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