When the government declares that everyone in the country should stay at home, the market for transport tends to suffer. Covid-19 has presented a series of unprecedented challenges to the auto industry. It’s altered consumer behaviour in a whole range of ways. Some might have been predictable; others rather less so. For those who had been intent on investing in a new vehicle, then the market conditions might have put this on pause. Conversely, now that lockdown is easing, for certain motorists now might be exactly the right time to look at a change of car.
Let’s look at the major changes that have occurred, and see what we might make of them.
More Interest in Alternative Financing
When the funds aren’t available, but the motorists really needs a new vehicle, then alternative means of financing might be considered. Long-term leasing, provided by and providers like them, is increasingly being turned to, especially by those who need a new car only while the virus is still a problem, and don’t want to have to sell the car when the danger has passed.
Rising Cost of Used Vehicles
Among the consequences of a slowdown in production of new cars is pressure on the market for used ones. Motorists who find themselves unable to secure a new car will instead look to the used market to fill the gap (albeit often in the short-term). This increase in demand has and in turn has left fewer options available for those who are in need of a change of vehicle.
Slowing of Production
Given the restrictions necessary to contain the spread of the virus, manufacturers have found it difficult to output new cars at anything like the same rate. While large sections of the production line are automated, there are still parts which aren’t – and thus social distancing has slowed things down. The fact that significant numbers of older skilled workers have had to self-isolate has slowed things down still further.
Of even greater concern was the disruption to the global supply chain. The global automotive industry is heavily reliant on parts imported from China, and the lack of parts coming from this part of the world has forced many companies into stalling production or halting it entirely.
Changes in Demand
When people perceive their economic future to be uncertain, they tend to delay major purchases. And there are few purchases more significant than that of a new car. At the same time, many commuters who might otherwise have taken the train or bus to work are investigating the possibility of a new used vehicle. Of course, the virus itself has made in-person purchases less popular, and . Dealerships have, however, been able to incorporate a range of anti-contagion measures, like screens, which lessen the risk to both staff and customers.