Covid-19: How a virus changed the car industry.

Covid-19: How a virus changed the car industry.

29 January 2021 Concept Car

You’ll be surprised to hear that the car market is doing pretty well, despite Covid-19. In fact, even many experts are quite surprised about how well the industry has sailed the murky waters of the pandemic.

This is bad news if you were expecting to get a dream bargain. Manufacturers and dealers have managed to keep prices stable and limit their losses to a minimum. Although sales fell dramatically during the first lockdown, they recovered soon after.

All in all, things could be a lot worse. And yet, there are definitely some lessons to be learned. One questions remains: What does all this mean for you?

In this article, we’ll give you an overview of the state of the industry and provide you with some important recommendations. At the end, you’ll have a better feeling about whether to buy or not – and what to do if you really need to get a new car.

But first, let’s go back to the beginning.

Only a year ago, the situation looked a lot worse.

The first lockdown came very suddenly and as somewhat of a shock. In an expansive article, leading consultancy McKinsey has described how sales fell from healthy pre-Corona levels to almost nothing over the course of the first two months in the UK.

In fact, the UK were one of the countries hardest hit by the pandemic. As McKinsey notes:

“In April, the United Kingdom, Spain, and Italy were more than 95 percent below the previous year’s levels, while Germany lost 61 percent and France lost 89 percent of new car sales compared with the previous year.”

Thanks to a variety of factors, consumer confidence and willingness to spend increased again over the subsequent months. During the second lockdown, it was almost back to business as usual. Nonetheless, it goes without saying that 2020 was not a particularly good year for the industry, as McKinsey admits:

“Despite a strong recovery in the subsequent months, new vehicle sales are still down 28 percent as of October year-to-date in the EU5 economies (Germany, France, Italy, the United Kingdom, and Spain).”

There are exceptions are of course. Against the odds, BMW has apparently sold a record amount of motorcycles in the UK in 2020, as Automobilsport reported. But these are outliers.

What about the current lockdown?

Psychologically, the current lockdown may be even harder to swallow than the first one. Protests in the Netherlands, a country otherwise known for its moderation and rationality, have shown that people are slowly losing their patience.

In terms of car sales, however, the situation looks a lot better than compared to last year.

On the one hand, most drivers have come to terms with the new realities. They understand that Corona could still be around for a while and that life has to go on. Postponing all expensive purchases simply doesn’t make sense from this perspective.

What’s more, dealers have reacted to the challenges swiftly and efficiently. At Concept Car Credit, for example, you can …

  • … take a look at almost all of our cars in our digital showroom. All relevant information is available online.
  • … set up car finance conveniently by phone and through our website.
  • Purchase a car by selecting click & collect. This means picking up the vehicle from our forecourt under strict Covid hygiene regulations.
    … have the car delivered to your home by one of our employees.

So, is this a good time to buy?

Let’s put it this way: For some, the current way of doing business may even be preferable to the way things were before!

Click & collect comes as close to the way you’d typically buy your car before Corona struck as possible. Sure, it may feel a bit less like a celebration and more like a business transaction. But on the other hand, the procedure is faster and more streamlined. Which may actually be to your liking.

Home delivery, in comparison, is even more convenient. In fact, it’s just about as convenient as car buying will ever get. It also means you get even better consumer protection. In that respect at least, Covid has brought some interesting improvements to the table.

Of course, you should take this step carefully. Covid presents all of us with extreme challenges. But then again, you should never buy a car without giving it a good deal of thought. It takes time and planning, regardless of the current pandemic.

We’ll gladly help you with these considerations and support you in taking the right decision. Talk to us now – either by calling us at 0800 093 3385 or by using our contact form.

Have you read:
Ability to repay: How do I know if I can afford a car loan?

So what does the future hold?

When Auto Express asked some of the leaders of the car industry about their predictions for 2021, they were almost all extremely optimistic.

They saw two lasting trends: The move towards online ordering and the even faster transition to EVs. Both should allow the car industry to remain resilient in the face of the ongoing pandemic.

As the Sunday Times have pointed out, car manufacturers have pretty much returned to business as usual in many respects. As part of this approach, they are currently …

  • … rolling out new models. These include exciting cars like the Ferrari Roma and McLaren Elva. And there is also a new Golf. This may not send your pulse rate racing. But is great news for families looking for an update on one of the world’s most beloved cars.
  • … expanding their range of electric vehicles. According to the Times, “these have included the Porsche Taycan and Mercedes-Benz EQC SUV, as well as the Mini Electric and the Honda e city cars.”

If all goes well, the car industry should get through the second lockdown just fine. And so, at least when it comes to cars, so should you.

29 January 2021 Concept Car