Auto Industry Will Take Years To Return To Pre-COVID Numbers
Just like every other aspect of life, the auto industry has felt the impact of the Coronavirus pandemic. In spite of a relative rebound after several months of falling sales, auto sales continue to struggle as a result of the current pandemic. The summer months marked something of a turning point for car dealers as sales numbers returned from a months-long dip in what appeared to be something of a return to normalcy, but those numbers have again stagnated, and in many cases dropped, as the effects of COVID-19 have lingered and touched every aspect of the economy.
According to the Center For Automotive Research, the reported losses from dealers and automakers could take up to two years or longer to return to pre-pandemic levels. This is obviously a huge problem for the auto industry that could last beyond the two year window should we experience a second wave of the Coronavirus in the Fall, as many experts have warned could happen.
The initial response of the auto industry, like almost every other industry in the U.S., was to shut down during March when news of the pandemic become front and center. While steps were taken to ensure the safety of workers and production facilities, the industry as a whole still experienced a 25% drop in sales. A side effect of falling sales numbers was that many of the facilities that manufacture autos had to cut back staffing, which resulted in an 18% drop in jobs within the industry.
Many of the industries that have been affected by the Coronavirus have been able to adapt by allowing employees to work remotely. Unfortunately, in the world of auto sales, that is less applicable since it has predominantly operated on a face-to-face sales model. Additionally, manufacturing has taken a hit since the production line work that is the backbone of the industry requires workers to be present to physically assemble vehicles. While auto makers have taken precautions to keep employees safe and implement proper protocols during the pandemic, it has no doubt had a drastic impact on the present and future of car sales.
Even with precautions in place that are designed to protect workers, there is still concern that safety remains an issue in large factories and manufacturing facilities that rely on thousands of workers every day. To this point, there has not been a severe outbreak that has drastically affected production at automotive plants, but there have been several cases of individuals that have tested positive for the virus. The results certainly speak to the credit of automakers staying vigilant about safety precautions, but it doesn’t eliminate the possibility of a large outbreak, which could be devastating for any manufacturer.
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