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Automotive
Automotive Industry Shifts from Expansion to Contraction
March 29, 2020
Automotive displays were expected to be one of the few growth areas for the display industry as larger and more complex multiple display cockpits are being introduced into most new models. However, COVID-19 is negatively impacting worldwide automobile production and Counterpoint estimates demand will fall 7% (Y/Y) in 2020, with most of the drop in sales during H1 2020.
China
The Chinese government is encouraging manufacturing companies to resume operations (albeit under strict conditions), and the Chinese economy to start improving during Q2 2020. However, business-as-usual will likely take until Q4 2020. Retail automotive sales should recover rather slowly as customers gain the confidence to go out to retail stores and test drive new vehicles. 1H 2020 are expected to fall12% Y/Y compared to 2019.
Europe
EU new car registrations declined by 7.5% and 7.4% Y/Y during January and February, due to stringent emission norms and a slowing economy rather than coronavirus. COVID-19 is expected to cause even greater declines in the coming months. Given the exponential increase in coronavirus cases in key countries the decline could get even steeper during H1 2020. Multiple car manufacturing facilities are temporarily closing or heavily scaling back production across Europe, including VW, Daimler, Ford, Fiat Chrysler (FCA), PSA Group and Renault. While FCA and PSA Group indicated operations would stop until the end of March, Renault did not indicate when its plants will reopen. BMW, VW, Toyota, Honda, and Nissan have also halted production in the UK with Jaguar Land Rover expected to follow suit.
Overall sales in the region are estimated to decline by around 7%, mostly due to steeper declines in key countries like the UK (-5%), Germany (-6%), Italy (-20%) and Spain (-10%) – which together account for a majority of vehicles sold in Europe.
USA
GM, Ford, and FCA US, are under pressure from unions to protect employees, and to follow government advisories, and decided to idle their plants in North America. Toyota, Honda, Tesla, and Nissan also announced a temporary suspension of production in North America. Car dealerships are expected to suffer in the coming months with governments calling for lockdowns to commercial centers, shutting off walk-in customers and test drives. Based on the current situation, a sales decline during 2020 of 6%, increasing to 8% in case of a prolonged outbreak of the virus is expected.
Table 1: 2020 Vehicle Sales and Y/Y Change by Region
Automotive Industry Shifts from Expansion to Contraction
March 29, 2020
Automotive displays were expected to be one of the few growth areas for the display industry as larger and more complex multiple display cockpits are being introduced into most new models. However, COVID-19 is negatively impacting worldwide automobile production and Counterpoint estimates demand will fall 7% (Y/Y) in 2020, with most of the drop in sales during H1 2020.
China
The Chinese government is encouraging manufacturing companies to resume operations (albeit under strict conditions), and the Chinese economy to start improving during Q2 2020. However, business-as-usual will likely take until Q4 2020. Retail automotive sales should recover rather slowly as customers gain the confidence to go out to retail stores and test drive new vehicles. 1H 2020 are expected to fall12% Y/Y compared to 2019.
Europe
EU new car registrations declined by 7.5% and 7.4% Y/Y during January and February, due to stringent emission norms and a slowing economy rather than coronavirus. COVID-19 is expected to cause even greater declines in the coming months. Given the exponential increase in coronavirus cases in key countries the decline could get even steeper during H1 2020. Multiple car manufacturing facilities are temporarily closing or heavily scaling back production across Europe, including VW, Daimler, Ford, Fiat Chrysler (FCA), PSA Group and Renault. While FCA and PSA Group indicated operations would stop until the end of March, Renault did not indicate when its plants will reopen. BMW, VW, Toyota, Honda, and Nissan have also halted production in the UK with Jaguar Land Rover expected to follow suit.
Overall sales in the region are estimated to decline by around 7%, mostly due to steeper declines in key countries like the UK (-5%), Germany (-6%), Italy (-20%) and Spain (-10%) – which together account for a majority of vehicles sold in Europe.
USA
GM, Ford, and FCA US, are under pressure from unions to protect employees, and to follow government advisories, and decided to idle their plants in North America. Toyota, Honda, Tesla, and Nissan also announced a temporary suspension of production in North America. Car dealerships are expected to suffer in the coming months with governments calling for lockdowns to commercial centers, shutting off walk-in customers and test drives. Based on the current situation, a sales decline during 2020 of 6%, increasing to 8% in case of a prolonged outbreak of the virus is expected.
Table 1: 2020 Vehicle Sales and Y/Y Change by Region
Source: Counterpoint
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