The auto industry will be facing changes that will cull the weak brought about by the coronavirus crisis, which is another of the major industries that will be forever altered.
Once after lockdown when industries reopen, and the factories star running, everything will be tailored fit a post-pandemic world. Here are the scenarios that will play out, which will be hard not to ignore.
All the new changes will cause big car companies to close down factories, and deal with labor problems.
When the coronavirus hit the auto industry, there was an excess of 20% more factory production. That extra production cost car makers money without any profit. Lower sales mean that unused assets will have to go or perish.
According to Peter Wells, director of the Center for Automotive Industry Research at Cardiff Business School in Wales,"Some of those big plants in Europe are going to really struggle." Companies that make smaller cars will be on the losing end like Fiat, Renault or Volkswagen's SEAT brand.
Electric cars will come sooner and be a hot ticket in the post-pandemic auto industry.
Lockdowns were a real killer of sales from gasoline and diesel-powered vehicles. Resiliency was seen with sales of electric cars and it weathered better than gas-powered cars.
Proof of this was seen in March, instead of falling registrations of battery-powered cars rocketed 23 per cent! This is according to Matthias Schmidt, an analyst in the auto industry.
Though in April, lockdowns did a number on electric car sale that fell by 31%, when others dived by 80 % during that period.
Schmidt said whether it is a quirk or trend about EV car sales and there is a need to check other factors.
In the past, SUVs were big-ticket compared to EV cars since cheaper fuel will be a factor. EV cars are still expensive by far compared to gas or diesel cars.
Opening for start-ups.
There will be more startups like Tesla that will further capitalize on the disruption caused by the coronavirus.
The coronavirus just shook up the big players in the auto industry, with startup slipping in like Byton and Lucid that are smaller startups with Tesla as the pioneer. A good time for smaller companies to chip away at the sales of bigger players.
Change has always been good, and according to Mr Wells,"Once the fractures start to emerge, things start to happen." Other companies were setback by the pandemic, like Uber and Lyft, with self-driving cars development still snagged.
Cars will be cheap.
Big companies are losing profits, like Renault that lost 70% last year, other carmakers are earning more like Tesla.
Some foreign investment will be fine but some will not, as some countries make it hard to enter their markets, if they help give jobs to people.
Globalization will be redefined.
This pandemic has shown how fragile everything is and it is leading to a rethinking of how things work, but some sectors are not willing to give up globalization.
Joining forces to survive.
Exposure of the weaknesses caused by the pandemic will pressure carmakers to decide whether to collaborate with other companies to produce electric cars.
A source said, "It's pretty likely that we will see former enemies or former competitors start to team up with each other."
This is how the Post Pandemic Auto Industry is speculated to play, all because of the disruption by the coronavirus crisis.
