How Corona will affect the automobile industry
Well, I think it’s safe to say at this point that things don’t seem to be going back to normal anytime soon. We won’t be asked to go out and rejoice as it’s all over.
First off is when lockdowns and measures of that will have done their job and beyond this point is where there's hope for normalcy to seep back in.
For now we will see a lot of less commute. The affair of one stepping out and sending out stuff or getting stuff done is going to be less so an increase in logistics.
Roads have never been this empty, which will in hand affect the fuel prices. Depending on the kind of Government you have in place, it will either go up or down. Needless to say, people aren’t going to be using their existing cars so the question of acquiring new ones is out. Unless there are cars functioning on models where your car’s delivered directly from the manufacturer. I think worldwide as of now there are just Tesla deliveries going on.
Things like rentals and public transport will see a downside too. Nobody wants anything to do with a car that’s probably been driven by 10 other people in the past couple of days. There may be restrictions later as well in regard to the use of public transport. Driving yourself around is going to be encouraged. That will not be a happy day for Greta Thunberg for sure!
At this point, I believe car manufacturers will have already suffered losses due to the halt in sales during the ongoing period. We should be seeing a boom in the number of entry-level cars in the market.
Again this is my personal opinion and I may be wrong on a few fronts, be happy to take on a chat if anybody has something to say.
With entry-level cars, should be a lot of attractive financing options and leasing options for the countries that have them. The banks and manufacturers will be doing all they can as long as they find someone willing to shell out money.
This also will be reflected to a certain extent in the used car space. Most of the people are going to be recovering financially post this in a way or another. Hence, I think the market will be almost at rock bottom at this point. Depreciation would have already won half the battle for the prices to drop anyway.
Do note, apart from the people who were looking for a car in the first place, even people who have been using uber or probably public transport will have to resort to buying a car or a bike. If ride-sharing is going to be discouraged, this is the next obvious step.
Another interesting aspect would be, that a lot of small car manufacturers and maybe even large manufacturers won't make it to the other end. They employ masses of people who have to be paid, while sales are on halt and you do the rest of the math. There’s no way they’ll survive unless they can change their product lines or find meaningful mergers. A lot of mergers will happen over the course of time as well. Companies may tend to join forces to be able to do well across various segments. Or at least the most important one- Profit making.
It’s not the best time to make a purchase right now, I’d say wait it out for another month before you see prices going a little haywire.
I hope we get through this strong and together. Do let me know what your thoughts are on mine above, looking forward to a good chat.
