This year’s global COVID-19 pandemic has been an economic nightmare for automotive manufacturers. But, as bad the lost COVID-19 sales have been this year, the total amount of unit sales is still outpacing the economic recession of 2008 and 2009. So, maybe it is not as bad as it seems.
2008-2009, the Great Recession takes hold
In 2008, the economic collapse was just taking hold as the recession daily became front-page news. Banks and automotive manufacturers were being called before Congress to testify as to their financial strengths, or the lack thereof. In quick succession, the government bailed out many large players in the economy. GM and Chrysler were amongst them. But, by 2009, sales were poor.
People were holding on to their money in fear of being laid off. But, it did not end there. Consumers were also afraid of getting stuck with a bank that might go belly up. Additionally, fuel prices were soaring. So, the thought of getting into a new car loan was something many consumers put to the back of their minds. There is no way around it. People were uneasy in spending on big-ticket items.
Today’s COVID-19 situation
Fast forward to today. Some say the COVID-19 global economic implosion is the worst thing that has ever happened to consumers. Well, it certainly has been deadly to people, and terrible on the economy.
Stepping back, however, and looking at the numbers paints a different economic picture. From January through the end of May 2009, the automotive industry sold 3,921,327 units. For the same time period in 2020, the units sold amounts to 3,956,692.
Keep in mind that March and April of this year were the worst points of the COVID-19 influence. The manufacturers had their plants shut down during those two months in accordance with regional lockdown requirements. Many dealerships were also closed. So, cars were not being made, and many on dealer lots were not being sold to any great degree.
The June bounce-back from COVID-19
So far, we have heard that the month of June is different. People are not only returning to work, but they are also purchasing cars again. Dealerships are actually flooded with those ready to buy their next ride, albeit more of them are purchasing through contactless methods, and through online means. Also, the manufacturers have restarted their plants.
Official figures for the month of June should be out within the next few days. But, initial speculation is leaning toward near normal, pre-COVID buying levels, or maybe within single-digit percentage points of it. Near 3 million units are expected to have been sold. Although the numbers for June may not be as strong as last year, they are still anticipated to be stronger than those during the economic recession of 2009. According to Monitor Daily, “Total sales in June are projected to reach 1,085,600 units”. In 2009, June’s unit sales were 850,654.
Not as bad as the economic recession
Overall, it seems that the COVID situation, as bad as it has been so far, has not been as bad for the automakers as the economic recession. At that time, the automakers and financial markets adjusted until consumers returned to the market. Today’s situation is similar. Markets were put on hold. They made adjustments and are now relaunching. But, they are doing so from a stronger position than that of anything in the past 15 years. That is a reason to look up.