Home Car News Effects of Corona Virus on the Auto Industry - Good & Bad

Effects of Corona Virus on the Auto Industry – Good & Bad

COVID-19 has spread its damage beyond imagination and has affected several businesses worldwide, especially the automotive industry

What came as a random headline from Wuhan, a city in the Hubei province of China, towards the end of last year has now affected the world as a whole. Besides claiming the lives of several thousand across the globe, SARS-CoV-2 a.k.a. COVID-19 or coronavirus has brought major business operations to a standstill. Data shows that the automotive industry faced one of the worst blows alongside fields such as aviation, tourism, hotels, etc.

A good majority of nations are continuing their full or partial lockdown protocols in a bid to ‘flatten the curve’ and control the spread. India is currently in its third phase of control measures and authorities are gradually allowing businesses to function with adherence to various safety guidelines. As a result, automotive dealerships in ‘green’ and ‘orange’ zones have been opened.

Still, experts predict that COVID-19 will create a long-lasting effect in the sphere of automobiles even after it is completely eradicated. While the pandemic mostly caused harm to the sector, there were some indirect benefits. In no particular order, here’s how COVID-19 impacted the global automotive scenario negatively as well as positively :

Poor sales

Of course, one of the biggest impacts of the virus was drastically poor sales. With the closure of automotive dealerships lasting almost two months, sales had hit an all-time low in recent history. In fact, the Indian automotive industry took a massive plunge and hit zero domestic sales in April 2020. As the fear of virus transmission is prevalent, sales remain poor even after showrooms were opened in select cities.

Boost in online sales

Whilst social distancing became one of the ‘new normals’, many OEMs acted fast to minimise losses by introducing online sales platforms. To encourage potential customers to make the shift to online, exclusive benefits are also available. Most of these platforms are structured in a way that there would be minimal physical contact. Test drives, important paperwork and deliveries will be conducted at the customer’s residence in a safe, sanitised environment.

Better service practices

The need of the hour is proper sanitisation and general cleanliness. ‘Almost’ every individual who has not been living under a rock and is aware of the current state of affairs are acting responsibly. Businesses are taking this a step forward by establishing controlled workspaces in addition to promoting work-from-home options. In the case of vehicle sales, dealerships have been directed by their parent OEMs to leave no space for health risks through effective and periodic sanitisation, social distancing, routine thermal monitoring, etc. Vehicles coming in for general maintenance or any other service need to be thoroughly sanitised, especially at all contact points. From now on, customers would be extra concerned about shabby cleaning.

Fall of public transport

One can be sure that social distancing exercises would be normal in the days to come even after COVID-19 bids adieu. Public transport would see a drastic drop in passengers unless concerned authorities take all the right steps to provide a safe travel ecosystem; adding space between seats being a good start. Even cab services such as Ola and Uber have resumed operations keeping safety concerns in mind.

Demand for personal vehicles

Personal or private vehicles would ideally witness some demand in parallel to the lessening use of public transport. Interestingly, Maruti Suzuki’s Chairman believes that there would be a post-COVID ‘sales boom’ as citizens step away from public transport services. A similar trend is being observed in China.

Cancellation of important events

The effect of COVID-19 on the automotive sector started receiving worldwide attention once important events were being cancelled as local authorities prohibited public gatherings. Perhaps the best first example was the cancellation of 2020 Geneva International Motor Show (GIMS) in March. Even in the field of motorsport, there have been immense losses due to the overall COVID confusion. For instance, the 2020 F1 season has still not started owing to back-to-back cancellations or postponements of GPs.

Substantially lower pollution

In densely populated regions, COVID-19 has made the skies clearer and the air cleaner (ironically) as there are almost no vehicles on the roads. Environmentalists have used this opportunity to prove their point even though memers took the subject to a ridiculously funny level. Furthermore, EV brands expect stronger sales numbers in the near future thanks to an evident result.

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