Automotive sector – not all gloom and doom?
But amidst the undisputable short term anxieties and real concerns about many businesses in the supply chain failing, there are some glimmers of hope, or at least opportunity, beginning to emerge and these are likely to re-shape the sector in the coming months and years, as recovery, inevitably, will emerge. It will be the way key players in the marketplace react to these ‘opportunities’ this will ultimately define who will be the winners and the losers in what is likely to be a pretty tough battle!
Let’s examine some of the positives that are likely to emerge:
Pent-up sales surge
Almost a fifth of car buyers are poised to make a purchase as soon as the current COVID-19 coronavirus lockdown is lifted, according to survey data published by What Car? An element of pent-up demand in the market with buyers less able to access dealerships will start to sow the seeds of recovery in the sector
Plants already resuming production
Several of the world’s top carmakers are reopening plants in Europe after a month-long shutdown following the coronavirus outbreak. Toyota, Renault, Hyundai, Volkswagen and Volvo are among those that have opened or are preparing to restart production at sites closed last month, though others including Jaguar Land Rover have pushed back plans to fire up their factories.
Technology-driven trends will revolutionise how industry players respond to changing consumer behaviour, develop new partnerships, and drive transformational change. The industry has already seen disruptive technology changes emerging that will favour those businesses, both in manufacturing and the supply chain, who are able to respond quickly and innovatively to these trends.
Global sales still set to grow
Despite the inevitable future shift toward autonomous vehicles and shared mobility, vehicle unit sales are still predicted to grow, but likely at a slightly lower annual rate than over the last 5 years.
Whilst an increased trend in car sharing and autonomous transport is likely to lead to a decline in private-vehicle sales this decline is likely to be offset by increased sales in shared vehicles that need to be replaced more often due to higher utilisation and related wear.
All these factors underpin our confidence in continuing to be a market leader in the automotive value chain and will drive our determination to continue to develop partnerships with our customers in the UK and around the world. Our strategic approach of diversification and expansion of our product offering will lead to continued growth as we sell more products for new vehicles. For us, this will more than compensate for the reduction in vehicle units produced. Coupled with our innovative and responsive approach, we’re sure that despite the challenges facing the sector, we will be able to respond to its rapidly changing demands.