Consultancy LMC in a wide-ranging, thoughtful presentation this morning on the auto industry post pandemic concluded that some negative effects are long term and permanent. While perhaps a starting conclusion to many analysts who view the recovery is akin to the deep U-shaped curve that the Global Financial Crisis of 2008-09 followed, the argument is compelling in AutoInformed’s view. LMC says globally this is a K-shaped curve. There are winners and losers. (Trade to Plunge as COVID-19 Upends Global Economy, COVID-19 Chaos as LMC Automotive Cuts Global Light Vehicle Sales Forecast by 3.7 Million Units)
Light vehicle demand presents a complicated and mixed global scenario with ongoing hits from social distancing LMC notes. The Oxford-based group warns those who think the pandemic impact will largely dissipate, in typical British understatement, “could be incorrect.” (Good and Bad? January US Light Vehicle Sales Down -3%)
Projections for 2020 Global Light Vehicle sales ended at 77.7 million units, down -14% from 2019 and with a stronger recovery than expected initially. LMC previously said that 2021 is poised to continue the recovery, with volume projected at 86.5 million units, up 11% from 2020. AI thinks while the past isn’t a 100% sure predictor of the future, the new – perhaps more virulent strains of the Covid virus, the nationalistic fights over vaccines, the emergence of fascism and sedition in the US, and stricter and ongoing social controls in most major market are huge risks. Significant shares of the public in the U.S., France, Germany and the UK say their lives have changed because of the COVID-19 outbreak, according to a new Pew Research Center survey.
Some noteworthy data points LMC presented today include temporary support measures – incentives, inventory replenishment, fiscal policy boosts – are “stuttering” but still evident to some degree in 2021.
LMC’s best estimate now is that the microchip shortage will be manageable, but the first half of 2021 could be impacted. (Do you think? Look at the competing demands from consumer electronics as people are sheltering in place – editor). Full year volume should not be hurt.
The idea of car ownership in a number of surveys has become significantly more popular during the pandemic. However, the abandonment of mass transit leads to more traffic congestion, more CO2 and promotes global warming.
Countering this: the BEV – battery electric vehicle – step change in 2020 “looks like a sustained expansion that will take years (20?) to mature to high BEV market penetration. (Electric Vehicles – a Virus That Can’t Be Controlled?)
As AutoInformed has said and written before, if you don’t like change – constant, sudden, predictable or unexpected – stay away from the auto industry.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Pandemic Negative Impact on Global Auto Industry Is Permanent. Debate is over How Bad and Who Gets Hurt
Projections for 2020 Global Light Vehicle sales ended at 77.7 million units, down -14% from 2019 and with a stronger recovery than expected initially. LMC previously said that 2021 is poised to continue the recovery, with volume projected at 86.5 million units, up 11% from 2020. AI thinks while the past isn’t a 100% sure predictor of the future, the new – perhaps more virulent strains of the Covid virus, the nationalistic fights over vaccines, the emergence of fascism and sedition in the US, and stricter and ongoing social controls in most major market are huge risks. Significant shares of the public in the U.S., France, Germany and the UK say their lives have changed because of the COVID-19 outbreak, according to a new Pew Research Center survey.
LMC’s best estimate now is that the microchip shortage will be manageable, but the first half of 2021 could be impacted. (Do you think? Look at the competing demands from consumer electronics as people are sheltering in place – editor). Full year volume should not be hurt.
The idea of car ownership in a number of surveys has become significantly more popular during the pandemic. However, the abandonment of mass transit leads to more traffic congestion, more CO2 and promotes global warming.
Countering this: the BEV – battery electric vehicle – step change in 2020 “looks like a sustained expansion that will take years (20?) to mature to high BEV market penetration. (Electric Vehicles – a Virus That Can’t Be Controlled?)
As AutoInformed has said and written before, if you don’t like change – constant, sudden, predictable or unexpected – stay away from the auto industry.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.