Luxury automobile : an unprecedented crisis

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Factories closed, jobs eliminated, projects frozen, equipment manufacturers at a standstill: the automotive market is among the main economic victims of Covid-19 and the population containment measures. A historic crisis for this sector, “the most serious in its history“, according to Eric-Mark Huitema, Managing Director of the European Automobile Manufacturers Association, even if some scenarios for ending the crisis are already being considered.

 

As part of the fight against the Covid-19 epidemic and following various public health measures, car dealerships, a “non-essential” trade, have had to announce their cessation of activities in a hurry.

 

Caught in a vice, the automobile market has been experiencing a supply and demand shock for several weeks. “This is historic. We’ve never had a downturn like this, we’re half a month short,” commented François Roudier, spokesman for the French Automobile Manufacturers’ Committee, dramatically.

 

Demand in free fall

 

Exceptional population containment measures decreed in the various European countries have been preventing any sales operations for several weeks now.

 

Alarmed, experts estimate that 14 million fewer cars will be sold worldwide in 2020, whereas by way of comparison, sales had fallen by only 6 million after the subprime crisis in 2008 brasil-libido.com.

 

In France, in March 2020 alone, the French car market fell by 72.2% and is expected to fall by 20% for the year as a whole. Same scenario in Germany: according to figures from the national automobile agency KBA, Volkswagen’s VW brand will lose 35% of its sales over one year, Audi 36%, Mercedes 28% and BMW 21%.

 

A hecatomb, which has also been accompanied by a collapse in vehicle deliveries: according to official figures, France has seen a 35.8% drop in the number of new car registrations on its territory, -37.7% in Germany, -85.42% in Italy and -39.4% in Switzerland.

 

An unprecedented crisis that spares no one, not even luxury brands, for example the Italian Ford sold only 1,857 units in March, a record drop of 80.08% compared to March 2019 kliknij po więcej informacji. The German top-of-the-range specialists BMW (Mini) and Daimler (Mercedes) also fell, by 61.8% and 73.8% respectively.

 

The fall in passenger car sales in Europe, but also supply problems due in particular to the collapse of the Chinese car market, led to the widespread closure of European car production plants.

 

Automotive production at a standstill

 

Faced with an exceptional drop in demand and a situation that is worsening exponentially, European manufacturers initially reduced their production rates before announcing the total cessation of their activity.

 

On 12 March, Italian manufacturer Lamborghini announced the closure of its factory “for at least two weeks” in order to limit the impact of the epidemic https://sverige-ed.com. On March 17, Germany’s Volkswagen shut down its plants in Italy, Portugal, Slovakia and Spain and is preparing to suspend all its production units in Europe. The French company Renault announces the following day, Wednesday March 18, that it will stop production in Morocco and Portugal.

 

Gradually, all the plants in continental Europe are closing their doors. The automobile industry, which has been hit hard, is at a standstill.

 

Tens of thousands of employees find themselves in partial unemployment. In Germany, the crisis threatens some 100,000 jobs in the automotive sector in the long term, according to an estimate by Ferdinand Dudenhöffer of the Swiss University St. Gallen, a leading branch of German industry. BMW President Oliver Zipse said on Friday that “circumstances as serious as these can present an existential danger, even for large groups“.

 

We are living through one of the most difficult trials in our history. It is moreover the case for the whole of the automobile industry, which, I remind you, employs 15 million people in Europe, including 400,000 in France,” explained Jean-Dominique Senard, the boss of Renault, in an interview for Le Parisien at the end of March.

 

Similarly, the Italian automobile sector (which includes Fiat Chrysler as well as the luxury brands Ferrari, Lamborghini and Alfa Romeo) employs 250,000 people in Italy and represents 5.6% of Italian GDP, according to a report by the Fondazione Ergo study centre published in 2019.

 

The recession and job losses will lead to a drop in new car sales, even after the coronavirus crisis,” according to a financial analysis by EY. Colossal economic and human losses therefore make us fear the worst, while recent announcements of economic recession and job losses have made us fear the worst, according to a financial analysis by EY.

 

How to save the automotive sector ?

 

In front of an upheaval in the industrial landscape, only the state can act to save the automobile sector, according to forecasters. In addition to the support measures for companies put in place by the government, various options are also explored, from the granting of scrapping bonuses to nationalizations of companies.

 

Hope could also come from China stránka. If the European car market is today paralyzed, the activity of Chinese car dealers has resumed : “Of the 8,721 4S stores surveyed in the country, 98.8% resumed their activities at 4:00 p.m. Friday, April 3,” said China Automobile Dealers Association.

 

Auto parts factories, which are now operating at full capacity, can therefore resume their exports, particularly of spare parts, and thus stabilize the global supply chain.

 

But switching to electric is certainly the most important challenge to overcome to resolve the crisis. According to Luc Chatel, president of the Automobile Platform (PFA), the automobile must undertake its greatest transformation since its invention : “In the electric sector, 75% of the value chain is in Asia. We must bring back production and of value creation in Europe and France, and it’s not just about batteries. And it is essential that the purchase of electric or hybrid cars gives rise to real bonuses. Electricity has taken off in countries like Norway, where consumers have been helped”.

 

The electric car also represented 8.8% of the new vehicle market in March, evidence that the electric constitutes a major challenge for the automobile market which, if it hopes to recover after the crisis, must respond the dizzying climate challenge and the strengthening of European CO2 standards.

 

 

Read also > CORONAVIRUS : FERRARI CANCELS CAR PRODUCTION UNTIL FURTHER NOTICE

 

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Factories closed, jobs eliminated, projects frozen, equipment manufacturers at a standstill: the automotive market is among the main economic victims of Covid-19 and the population containment measures. A historic crisis for this sector, “the most serious in its history“, according to Eric-Mark Huitema, Managing Director of the European Automobile Manufacturers Association, even if some scenarios for ending the crisis are already being considered.

 

As part of the fight against the Covid-19 epidemic and following various public health measures, car dealerships, a “non-essential” trade, have had to announce their cessation of activities in a hurry.

 

Caught in a vice, the automobile market has been experiencing a supply and demand shock for several weeks. “This is historic. We’ve never had a downturn like this, we’re half a month short,” commented François Roudier, spokesman for the French Automobile Manufacturers’ Committee, dramatically.

 

Demand in free fall

 

Exceptional population containment measures decreed in the various European countries have been preventing any sales operations for several weeks now.

 

Alarmed, experts estimate that 14 million fewer cars will be sold worldwide in 2020, whereas by way of comparison, sales had fallen by only 6 million after the subprime crisis in 2008.

 

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Factories closed, jobs eliminated, projects frozen, equipment manufacturers at a standstill: the automotive market is among the main economic victims of Covid-19 and the population containment measures. A historic crisis for this sector, “the most serious in its history“, according to Eric-Mark Huitema, Managing Director of the European Automobile Manufacturers Association, even if some scenarios for ending the crisis are already being considered.

 

As part of the fight against the Covid-19 epidemic and following various public health measures, car dealerships, a “non-essential” trade, have had to announce their cessation of activities in a hurry.

 

Caught in a vice, the automobile market has been experiencing a supply and demand shock for several weeks. “This is historic. We’ve never had a downturn like this, we’re half a month short,” commented François Roudier, spokesman for the French Automobile Manufacturers’ Committee, dramatically.

 

Demand in free fall

 

Exceptional population containment measures decreed in the various European countries have been preventing any sales operations for several weeks now.

 

Alarmed, experts estimate that 14 million fewer cars will be sold worldwide in 2020, whereas by way of comparison, sales had fallen by only 6 million after the subprime crisis in 2008.

 

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Thanks to its extensive knowledge of these sectors, the Luxus + editorial team deciphers for its readers the main economic and technological stakes in fashion, watchmaking, jewelry, gastronomy, perfumes and cosmetics, hotels, and prestigious real estate.

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