Published on October 23rd, 2020 | by Daniel Sherman Fernandez0
Global Automotive Sector To See Double-Digit Growth In 2021
Fact, 2019 was a sterling year for most car manufacturers around the globe after year on year healthy profits. Even with disruptions from some governments for a strict move away from combustion powered vehicles in major city centers, most car manufacturers kept spending on research and development to introduced new generation cars. Complete battery powered or plug-in hybrids with more emphasis on emission free driving in city centers.
Then a whole ‘new norm’ happened.
The coronavirus (Covid-19) pandemic overturned assumptions about the development of the global economy and destroyed any hope of steady growth for many industries. A recovery in 2021 is expected, but it will not be straightforward.
Even if the coronavirus is brought under control, companies will have to rethink their business models and adapt to changing consumer needs, in response to both the pandemic and existing trends that have been amplified by the virus.
Meanwhile there will still be some nations around the world, Malaysia for example where emissions and rising CO2 numbers are made a priority in writing only but not in enforcement or action to do better.
PRESS RELEASE: New report by The Economist Intelligence Unit (The EIU) forecasts growth and key risks for the global automotive industry
● The global automotive industry will witness double-digit growth in 2021 but it will not be enough to make up for the slump caused by the coronavirus (Covid-19) pandemic.
● New car sales will rise by 15% in 2021, following a fall of 18% in 2020. Commercial-vehicle sales will increase by 16% in 2021, after a 16% drop in 2020.
● Automakers will be forced to review their global operations, resulting in plant closures and widespread job losses as the industry consolidates.
● Electric vehicle sales will soar from 2.5m this year to 3.4m in 2021, but China’s share of the market will shrink as European sales continue to soar.
The coronavirus (Covid-19) pandemic has brought a decade of expansion in the global automotive industry to an abrupt halt, with sales plummeting in most markets. A new report from The Economist Intelligence Unit (The EIU) predicts that global new-vehicle sales will return to double-digit growth in 2021, but will fail to recover fully. Only four countries will see sales bounce back to 2019 levels: China, Turkey, Taiwan and Ukraine. As a result, there will be more job cuts across the industry, with plants and suppliers closing in countries where the markets are slowest to recover.
Ana Nicholls, Director of Industry Operations at The Economist Intelligence Unit, says:
“After a disastrous 2020 for the global automotive sector, we now expect an upturn in 2020, but carmakers across the world will need to seek out growth pockets while pushing through extensive cost-cutting programmes. The rivalry between the US and China will continue in 2021, regardless of who wins the US 2020 elections. Sanctions and investment restrictions may even force third-party countries to choose between the two rivals.”
The report also focuses on the shift away from fossil fuel vehicles, in favour of low-emission or electric vehicles. Global EV sales will rise sharply in 2021, to around 3.4m units, supported by generous government incentives, increasingly stringent emissions legislation and new launches. However, China’s share of the global EV market will shrink, while Europe’s will continue to rise. Online sales are another trend likely to gain momentum in 2021, if motorists remain wary of visiting dealerships.