The global automotive industry saw its crisis when COVID-19 pandemic swept across the world. While the sales of automotive vehicles had fallen in January, February saw the biggest fall ever recorded in the global time series, with sales declining by 79.1%. Many businesses ranging from food and beverages to automotive industries are significantly affected by the unpredictable crisis, preparing to deal with unfavourable post-COVID situations. In this article, we will provide a comprehensive list of ways the automotive industry will be affected in post-COVID world.
Alternatives to Automotive Car Purchases
COVID-19 triggered reversal of trends such as increase in car rental services and decline in car sharing/carpooling due to social distancing. The demand for car sharing, ride-hailing or carpooling has also been impacted. While this does not really come as a surprise, more individuals have switched to the alternative of car rental services due to its wide range of customisable options. As COVID-19 has led to structural changes in shared transportation choices, professional car rental companies have come up with better solutions for all. With less usage of cars for personal use due to increase in working from home post COVID implementations, individuals have switched to car rental commutations.
Decrease in Supply Chains of Automotive Cars
The production of automotive cars was severely impacted as car factories started to close. From as early as February 2020 when COVID-19 started global widespread, most factories have suspended manufacturing due to lack of sales. The closures had a huge impact as seen in the drastic fall in the world’s auto supply chain. As the virus spread worldwide, many car factories in Asia, Europe and North America closed down, further hurting the economy.
With orders being put on hold, the slowdown in the supply chain will also postpone new car launches until the situation is relieved. In the near coming months, some factories are able to open due to existing automotive digitalization strategies.
Taxis and Private Hire Drivers
With a huge number of tourists and individuals staying at home due to the pandemic, taxi and private hire drivers are getting fewer rides. This is especially worrying for local drivers as their daily livelihoods are severely impacted by the coronavirus. However, there were some car rental operators that provided rental waivers or rebates to help their drivers pull though economically. The unexpected COVID-19 has brought cyclical impacts such as higher unemployment and lower income in the automotive industry.
The lockdown measures have further worsened the situation for taxi and private hire drivers as people are scared to grab a ride due to the virus. The effects on the labour market are particularly apparent, where the number of jobless claims has increased. This indirectly caused the drastic drop in the trend of hiring taxi and private drivers.
How to Move Forward
At this point, we believe that you have understood comprehensive ways of how the automotive industry is impacted by COVID-19. Therefore, we have provided a platform – an automotive company to answer you with professional financial solutions.
As one of the top professional providers of affordable automotive services and commercial vehicle rental in Singapore, ETHOZ offers auto leasing, capital financing equipment leasing Solutions, commercial vehicle financing, and other car rental services in Singapore to drivers and business owners seeking to optimise their operations, where zero downtime, predictable operating costs and controlled cash flow outlay are paramount.
Evolving from its humble roots in car leasing to become a full-fledged Automotive Solutions provider, we pride ourselves in prestigious automobile rental services with all sorts of features and functions to satisfy your needs. Furthermore, the quality and expertise of our fleet management team ensure that dedicated efforts and service works are offered to sustain long term relationships with everyone.
If you ever need any help in the automotive industry, you can simply reach out to a member of our team at firstname.lastname@example.org to explore the options available to you. If you like reading more of such content, head over to our blog to learn useful tips and case study!