The Covid-19 pandemic has hit the automotive industry hard in 2020. As consumers were not allowed to visit the showrooms and many factories around the globe were forced to shut down, the drop in vehicle sales was a natural consequence. The result was to have the lowest global vehicle sales since 2011, when China was taking off and the Western world was facing an economic recession.
The volume of vehicles sold dropped by 13% to 78.35 million units. This included passenger cars, pickups, light commercial vehicles, and in some minor markets the heavy commercial vehicles too. The information collected includes figures from 156 countries/territories all over the world, and estimates for the missing ones. This is probably the most accurate analysis you will find about it on the internet.
China prevented a further drop
The pandemic fist affected China and then the rest of the world, and this also applies for the car sales. In fact, China showed the first massive drop back in February and started to catch up since May. The final effect was a moderate -2% to 25.24 million units, which is actually a good result compared to the decrease seen between 2019 and 2018, at -7%. The active role of the government in boosting sales through incentives payed off at the end. Last year, China counted for 32% of global volume.
China’s relative good results contrast with the double-digit drops in the US and European markets. Sales in the former totaled 14.55 million units, down by 15%, and setting the lowest record since 2012. The situation was even worse in Europe-Turkey, where sales collapsed to the lowest since level since 1995 at just 14.55 million units (yes, the same quantity of USA). Volume decreased by 21%, and if Turkey is excluded, the variation is -24%.
Turkey boosted by black market and low-interest loans
The Turkish was the world’s fastest growing car market last year. Volume jumped by 61% to 773,000 units, the highest result since 2017. There are two main reasons that explain how sales increased so much in a turbulent year like 2020. First, the demand for automobiles has been increasing steadily since June after three public lenders introduced low-interest loan packages for individual and corporate customers.
Second, the problem with the speculation. As exchange rates continue to increase, many consumers bought a car with the aim of investment. The official car distributors are not selling the cars directly to the final customers, but to the so called “galleries”, or another intermediary that buys the new cars with wholesale discount. The regular consumers are forced to buy their new cars in these galleries at a higher price, as they don’t want to wait for 2 or 3 months to get a new car with the risk of paying more due to the rapid devaluation of the Turkish lira.
Source: ACEA, Anfavea, Fenabrave, Aniacam, Andemos, Araper, AEADE, Cadam, Amda, Renault annual results, KBA, CCFA, UNRAE, SMMT, BHP, OICA, AIVEMA, ADAP, ACAU, CAVEM, ODD, CAAM, JAMA, KAMA, NAAMSA, AAA, TAIA, MAA, VAMA, GAIKINDO, HKAA, OAR, Stat.UZ, among others.