The outbreak of COVID-19 has already impacted the automotive industry significantly, according to JATO Dynamics, a leading provider of global automotive data and insight. Global vehicle sales totaled 5.55 million units in March 2020, down by 39% from March 2019.
This represents the largest year-on-year monthly decrease since 1980, when JATO Dynamics started to collect data – even surpassing the global financial crisis in November 2008, which saw a 25% decline in sales.
With the pandemic spreading across the globe, strict lockdowns in key markets, combined with consumer panic and economic uncertainty, have all contributed to the huge decrease in sales last month.
“This downward trend is not simply due to the restrictions of free movement. The industry is being impacted largely by the uncertainty for the future, and this issue started to arise even before the pandemic took hold,” said Felipe Munoz, JATO’s global analyst. “We have to remember that the industry was already operating in a challenging environment, especially toward the end of last year. The trade wars, lower economic growth and tougher emissions regulations came long before the COVID-19 crisis. And unlike previous recessions, we’re not just dealing with people’s fears or purchase delays. This time we have to consider that consumers are simply unable to leave their homes.”
Overall, the total for the first quarter of 2020 already highlights a reduction of 26% Q1 2019 with sales decreasing to 17.42 million units.
Europe hit hardest
China, Europe, and the U.S. all posted double-digit declines in March. However, Europe was hit the hardest, with the lowest number of sales for March in 38 years. The passenger cars registrations for Europe-27 comprised of 848,800 units, down by 52% compared to March 2019. This result follows declines in January and February, taking the quarterly volume down to 3.04 million units.
Registrations fell in all 27 markets, but with varying severity. In Finland and Lithuania volumes fluctuated only marginally. In Finland’s case, isolation was advised by the government but was not mandatory, with consumers in Lithuania still able to purchase new cars remotely, with delivery taking between 3 to 7 working days. Swedish car registrations fell by 9%, the third smallest decline after Finland and Lithuania, this is also due to the population not being forced to stay in their homes.
In contrast, markets were significantly hit in Italy, France, Spain, Austria, Ireland, Slovenia, Greece and Portugal, where the combined volume fell from 634,600 units in March 2019 to 161,800 units last month. The impact of COVID-19 was at its peak in March for these countries and consequently the majority imposed strict lockdown policies on their populations.
As expected, all segments across Europe were impacted negatively by mandatory lockdowns. Those most affected were city-cars, MPVs and subcompacts. This is in part due to the collapse of the Italian and French markets, on which small cars are heavily reliant for sales – in 2019, 38% of A and B segment registrations in Europe occurred in Italy and France. The lowest decrease in registrations was recorded by Midsize cars (D- Segment) and this can be explained by positive results reported by Tesla Model 3, which was Europe’s second best-selling car in March.
Registrations of SUVs fell by 48% to 338,300 units while increasing their market share to almost 40%. MG (owned by the Chinese SAIC) was the only group to post an increase in registrations, with its volume jumping from 1,327 to 2,592 units. Some models performed better than others. For example, volume only fell by 5% for the Volvo XC40, which became the top-selling premium SUV in March, and the Range Rover Evoque registered 5,700 units, down by 3%. Whereas Audi and Mercedes increased the registrations of their E-Tron and GLE by 86% and 213% respectively.
By fuel type, EVs were able to increase their registrations by 15% to 147,500 units in March, posting a new record market share of 17.4%, or 10.1 percentage points higher than seen in March 2019. Contrary to the trend in 2019, the growth was not driven by Tesla. The positive results came as a result of more electrified vehicles from Mercedes (+44%), Volkswagen (+240%), BMW (+15%), Hyundai (+25%), Volvo (+79%), and Suzuki, among others.
However, details by powertrain highlights that only pure electric cars (BEV) and plug-in hybrids (PHEV) drove this growth, as hybrids posted a decline of 11%. In fact, the BEV figures were only 10,000 units less than the hybrids. The Volkswagen e-Golf, Audi E-Tron, and Volkswagen e-Up, posted impressive results for BEVs in March. The new arrivals like the Mini electric, Peugeot 208-e, MG ZS and others accounted for 17% of all BEV registrations.
Overall, the continent was the second region to be severely affected by the virus, following China and Korea on the timeline. The results posted for Europe in March, were similar to those posted in February for China. However, unlike China, the recovery for Europe is likely to be U-shaped rather than V-shaped.