Has the automotive industry reached its bottom?
The EU new passenger car market fell by more than half in March, by three quarters in April and by half again in May. Despite the terrible situation, at least the results of new vehicle registrations, which fell by almost 42% and 2.3 million vehicles in the first five months of this year, are at least significant. The reason is a global problem, it is a coronavirus, and everything connected with it, which can be described as a supply shock.
The main reason was the disintegration of supply chains, which made it difficult to supply production, followed by the closure of car showrooms and the voluntary shutdown of European car production.
A successful restart of the industry will be decided by the customer, especially the EU, who buys most of the European production, rather than the resumption of production itself. However, in recent months, the local consumer has solved other problems than choosing a suitable new vehicle, so it remains to monitor the force with which customers will return to car dealerships after the restrictions are lifted. However, we cannot forget about a third of the production of the entire industry, which goes beyond the borders of the EU, ie especially to the USA, China and Japan, where it is not yet possible to talk about an increase in interest in cars.