Pandemic Acts as Catalyst for Additional Change in Auto Industry, Analysts Suggest
Source: The Detroit Bureau
The COVID crisis is proving to be a bigger accelerator for altering the automotive industry in fundamental ways than originally expected.
OEMs must continue to grapple with the challenges brought about by autonomous driving, shared mobility, driveline electrification, but now there are additional changes in manufacturing as automaking transforms to a product from a service. That’s the message emanating from the Society of Automotive Analysts’ 2021 Automotive Outlook Conference.
There’s little doubt that the pandemic impacted the industry, with annual sales falling 14% worldwide, and 16% in the United States, according to Pete Kelly, managing director for LMC Automotive. While Kelly doesn’t foresee a complete rebound in the U.S., he does see a 9% increase to for 2021, with global sales improving to 87 million units from 74.6 million, although a shortage in semi-conductors is holding back production.
But the pandemic’s impact on sales was brief, and its effect on sales not as deep nor as long as the Great Recession of 2009, according to Daron Gifford, a partner at Plante Moran. In fact, as COVID restrictions began to ease, consumers moved to the perceived safety of the suburbs and private transportation, leading to abnormally low inventory levels as production fell faster than demand.