Wednesday December 23, 2020
Third quarter was acceptable
Auto industry is facing a new lull
The corona crisis is shaking the auto industry worldwide. The third quarter of this year brings something like a breather, as a study shows. But it could go down again.
According to a study by the consulting firm EY, between the beginning of July and the end of September the global automotive industry has already come close to the level of the previous year in terms of turnover and car sales. In both categories, the global 17 largest automakers in the third quarter were only five percent below the values for the same period in 2019, according to the analysis. This was a significant increase compared to the second quarter.
From April to June, the car companies had in some cases accumulated billions in losses in view of the spreading corona pandemic, global border closings and collapsing supply chains; only 6 of the 17 largest manufacturers were not in the red. In the summer, however, business picked up significantly – according to EY, on average in the mid double-digit percentage range. The sales of the top car companies rose in the third quarter compared to the previous quarter by 53 percent, the new car sales climbed by 46 percent.
However, it remains more than questionable whether the recovery in the car market will be sustainable. New corona restrictions these days in many countries around the world are likely to have a negative impact on the entire economy and thus also on the auto sector, economists suspect. EY auto expert Constantin Gall is also skeptical – and again fears heavy losses for the automaker. "The situation is deteriorating in most of the major markets, there are again some massive restrictions on public life, and car sales are currently falling significantly."
EY estimates that a renewed interruption of the supply chain and a standstill of production like in spring are not to be expected these days. But if new vehicle sales come to a complete or partial standstill, another industry-wide profit slump in billions in the fourth quarter will be unavoidable. After all, the Chinese sales market, which continues to develop positively, is proving to be a bearer of hope. In the third quarter, China was the most important pillar of the automotive industry – especially for the large German manufacturers VW, Daimler and BMW. The share of China in the global sales of the German automaker has grown from 35.7 to 39.2 percent compared to the same period last year, according to EY.
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