Global light vehicle sales reverted almost to 2012 lows with only 6.2 million sold in January. The emergence of coronavirus (COVID-19) in Wuhan, China drove the dramatic decline.
“While the drop in January vehicle sales on a global scale is alarming, sinking 13.9% compared with the same month in 2019, it is positively disastrous in China itself," said Mike Vousden, Automotive Analyst at GlobalData, which crunched the numbers. Sales in the world’s single largest vehicle market sank 33.1% compared with January 2019 to just 1.66 million units.
North America’s January 2020 sales sank by 3.6% to 1.32 million compared with January 2019 – a notably faster rate than the modest 0.8% yearly decline seen one year earlier.
“The longer-term effects are difficult to quantify but it is likely that sales growth will continue to be stunted throughout the rest of 2020, even if the spread of COVID-19 can be contained," Vousden addded.
"This is because many of the components that go into building vehicles all over the world are produced in China, in factories that are currently standing still because it is too risky for workers to return. The auto industry is poorly prepared for such supply chain shocks because many operations run on a ‘just-in-time’ basis, with very limited numbers of stockpiled parts.”
Already, companies such as Jaguar-Land Rover, Toyota and PSA have said they expect to see supply chain disruption. While Fiat-Chrysler has warned it may have to halt some European production if parts supply continues to be affected.