An Overview of the Current State of the Automobile Manufacturing Industry
The United States automotive manufacturing sales slightly declined in 2019, the market was on solid footing. Over 17 million vehicles were sold, good for the 5th best year in history. Unfortunately, the coronavirus has put a temporary hold on positive sales data.
Due to the global pandemic, sales are forecasted to decline by 27% in 2020. This may sound discouraging to investors and industry insiders. However, a decline of this magnitude still results in 12.5 million units sold, which is more than any year from 2009 to 2011.
Read on for an overview of the current state of the automobile manufacturing industry. Explore reasons for optimism as we move into the latter part of the calendar year.
The coronavirus pandemic has affected some states equally. The Northeast has been hit especially hard, while the South is returning to business as usual.
States like Texas, Florida, and Georgia are starting to ease the government’s lockdown orders. The state economies are starting to roll as a result.
Experts are forecasting a smaller impact on vehicle sales for these states. For example, sales in Phoenix were down just 14% during the month of April.
Automobile suppliers cannot assume that the market has screeched to a halt. Instead, they need to hyper-responsive to customers’ needs, especially those in regions less affected by the pandemic.
Intense Industry Competition
With demand for new and used vehicles taking a hit due to Covid-19, industry competition will be intense. Many potential car buyers are struggling financially due to state-mandated business closures.
This means that manufacturers need to win over customers from a diminished pool. The best way to reach prospective buyers is with incentives and discounts. Manufacturers are highly likely to increase discount spending in 2020.
Automobile Manufacturing Prepared for Crisis
The 2008 Great Recession is still fresh in the minds of the auto industry. This helped them prepare for future crises and the coronavirus pandemic is no different.
There will certainly be some short-term struggles, but the industry has many tools in its kit to remain successful during a downturn. If you enjoyed this take on automobile manufacturing, check out our blog for more expert takes.