Coronavirus Effect on the Automotive Market US – What will be the effects?
“Coronavirus” effect on the automotive market US!
According to the Automotive Research Center in Ann Arbor, Michigan, automobile sales in America, one of the largest automotive markets in the world, could be seriously affected by the Coronavirus. By the end of 2020, it is predicted that the market will lose nearly 3 percent of sales at best.
According to Kristin Dziczek, the vice president of Industry, Labor and Economy of the Center for Automotive Research research company, the US economy will lose 94,400 employees and total revenue of $ 7.3 billion in every seven-day period that consumers have given up buying cars. In addition, the state’s tax revenues will decrease by $ 2 billion!
Dziczek also pointed out that the restriction of people’s movements to prevent the Coronavirus from spreading and that there will be a serious loss of demand in the coming days in already optional car-buying trends. Dziczek also stated that it may be slower for the automotive industry to return to its old days after this crisis has been overcome. The reason for this is that expensive products such as automobiles rank lower in the priority ranking of the consumers.
“This is worrying,” Kristin Dziczek told Automotive News. We face serious disruptions in demand and supply due to the Coronavirus. If people living in other locations don’t want to buy cars, we have a serious problem. ” said.
Experts predict that automobile sales will suffer an effective decline. LMC Automotive announced in its estimate that the sales of the US automotive market will decrease by 300 thousand compared to 2019. This figure means a 3 percent loss compared to last year.
LMC Automotive executive Jeff Schuster said, “The community’s response to the Covid-19 epidemic, that is, means a serious health crisis. We cannot ignore the negative crisis this will cause on the economy and the automotive industry. ” said.
In the midst of uncertainty, #Fed cuts rates to zero (on a Sunday) and adds $700 billion in QE in attempt to keep the US from tipping into a virus-induced recession. As many parts of US are in or nearing lockdown, the expected negative impact on #autos continues to increase.
— Jeff Schuster (@jwschust) March 15, 2020
Even if the economy returns quickly due to the Coronavirus epidemic, the total US market will decline by 2.9 percent and finish 2020 with 16.4 million units, according to the ALG Project.
The factories in America, which have stopped production, also affect the Coronavirus effect on the automotive market US. For example, Volkswagen put its factory in Chattanooga for maintenance to clean on Monday. They are working to keep facilities open for as long as possible in Detroit. But Dziczek stated that this situation is inevitable.