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Study #: 3838
Individual User License: US$ 1,800
Global vehicle production is expected to decline 20% in 2020 in tandem with new vehicle sales. This will be the largest single-year decline in recent history. Even before the pandemic, vehicle production was weak in a continuation of trends that began in 2019:
Lower economic output combined with skyrocketing global unemployment led to significant reductions in consumer income, which – along with movement restrictions – suppressed new vehicle sales during the first half of the year. Vehicle dealerships closed in most countries during March and April, which dampened new vehicle sales during that period despite efforts by some manufacturers to transition to e-commerce.
Even as the immediate effects of COVID-19 begin to ease, lower scrappage rates, increased substitution with used vehicles, prolonged income uncertainty, and unstable credit markets will continue to suppress consumer demand for new vehicles throughout 2020.
On the other hand, a shift away from public transportation in densely populated areas, along with increased incentives and subsidies for new vehicle purchases, will support demand for new vehicles to some extent during the remainder of the year.