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New car sales crisis as COVID19 continues

Estimated trade impact of the coronavirus (COVID-19) epidemic on the automotive sector as of February 2020, by market(in million U.S. dollars) byStatista

U.K. new car sales crisis and cases study

By: Nattanai Kuprasert

The automotive industry has been hit hard from the outbreak and continuation of COVID19. The cities or even countries are lockdown. People are encouraged to stay home both for the good of themselves and society. In this situation, not even talking about buying new car that is obviously unenthusiastic, people are less driving out. Posing one of the significant issues around the employment decision in this circumstance, which may affect numbers of people lives and well-being.

Focusing on the U.K. context, The Guardian shows that new car sales in the UK plunge by 44% as coronavirus bites, a steeper fall than during the financial crisis. This result mainly from showroom closures, that also sent sales tumbling.

Sales in March were 203,000 down on the same month a year earlier, according to data released by the industry body, the Society of Motor Manufacturers and Traders (SMMT). Typically, March is traditionally one of the strongest months of the year for new car sales according to the record releasing of new number plates. However, this was the weakest March since the late 90’s.

The U.K. case is one that need to keep eyes on. Going for worse, Britain’s car industry was already struggling before the pandemic – hit by a combination of falling sales, a shift away from diesel vehicles and Brexit uncertainty.

“How long the market remains stalled is uncertain but it will reopen and the products will be there. In the meantime, we will continue to work with government to do all we can to ensure the thousands of people employed in this sector are ready for work,” said the chief executive of the Society of Motor Manufacturers and Traders.

This once again remind an important concept in our class. It shows the integration of economic system, which relies on both the public and private sector to work collaboratively.

As well, dramatic falls in new car sales have been reported in other European countries that introduced lockdowns earlier than Britain, including Italy, where sales fell 85% in March, France, down 72%, and Spain, which was 69% lower. In the broader issues, as assembly lines ground to a halt in March because of the lockdown across Europe, this disrupted global supply chains and will surely bring ripple effects to other part of the world.

Responding to the COVID19, two cases are to be observe. In the U.K., initially the workers, employed by the Staffline agency, has been informed they were to be ‘let go’ after the Jaguar Land Rover site announced it was temporarily ceasing production during the coronavirus. However, crisis over 100 agency workers employed on the DHL logistics contract at Tata Motors’ Jaguar Land Rover plant at Halewood in Merseyside have had their jobs saved. This following the intervention of Unite Union and the support of local MP Maria Eagle, Staffline that led to the reversion of the decision. Now, the workers will instead be furloughed on 80% of their pay

In contrast, Japanese automaker such as Nissan Motor announced to lay off about 10,000 workers at its idle American plants while Honda Motor is placing more than half its U.S. staff on temporary leave, as Japanese automakers step up their response to the coronavirus pandemic.

Sources: New car sales in UK plunge by 44% as coronavirus bites. The Guardian. Retrieved from https://www.theguardian.com/business/2020/apr/06/car-plant-shutdowns-may-cost-auto-industry-more-than-100bn-covid-19

Roberts, G. (2020). Updated: Daily automotive coronavirus briefing. Just Auto. Retrieved from https://www.just-auto.com/news/updated-daily-automotive-coronavirus-briefing-free-to-read_id194210.aspx

Estimated trade impact of the coronavirus (COVID-19) epidemic on the automotive sector as of February 2020, by market(in million U.S. dollars). Statista. Retrieved from https://www.statista.com/statistics/1103657/economic-trade-impact-of-covid-19-on-the-auto-industry-by-market/

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