The Australian new car market has been copping blows from left, right and centre in recent times. We’ve seen the end of local manufacturing, tighter lending, the demise of Holden, and 23 consecutive months of declining new car sales. Now to add insult to injury, the coronavirus pandemic is going to inflict more carnage on an industry already under stress.
Of course, this isn't just a local issue. On a global level, the car industry is dealing with a myriad of setbacks.
We are unlikely to see any motor shows in 2020, the Geneva, New York, Detroit and Paris events have already been canned as a result of the pandemic. Manufacturing has all but ceased and new model releases have been abandoned.
The recovery could be slow leading to longer wait times for buyers. With many components manufactured in China where the outbreak began, the supply chains have been on hold in many areas making the call to stop production necessary from a practical perspective as well as a health one.
Brands keen to highlight upcoming models have turned to live streaming reveal events, which does make sense, but the opportunity to interact with new products is increasingly limited.
Perhaps putting the car industry on hold is a good thing, after all, when there is toilet paper to be hoarded who has time to worry about new cars?
Back in Australia, the economic uncertainty will torpedo consumer confidence for the foreseeable future. Record low interest rates sound great but tighter access to credit and a shaky jobs market will see people holding onto whatever disposable income they have. A shiny new car in the driveway is something that can more often than not be put on hold.
The full effects of the coronavirus on the Australian car industry may not be fully known for many months or even years. The situation we are in conjures up plenty of questions, will new car prices fall, what will happen to second-hand values? Will innovation be compromised while designers and engineers ride out the pandemic?
There’s potential for another post GFC type period where the industry treads water while the market tries to normalise.
Hopefully, when the dust settles, the industry will be as vibrant as every and humanity will not have succumb to battling to the death over a bit of bog roll.
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