COVID boosts automotive market
Alex Gruzdev
Global Sales & Marketing Leader | Driving Market Disruption through Strategic Innovation & AI-Driven Solutions | Keynote Speaker & Author”
What is going to be with the annual mileage this year? There are two opposite points of view. The first one is that due to COVID restrictions during spring, annual mileage will decrease; second, due to fears to use public transport, private cars will increase. Who is right, we will see at the end of the year, but already today, we can see some trends and signs to predict the future.
We can take the German and US markets as an example. The US is the biggest market, and Germany is the biggest market in Europe.
Germany started the annual mileage decrease on 11 of March and reached pre COVID values back on 20 of May. So the period of decline was 68 days, with the average decrease during this period 35%.
The US car parc. The COVID isolation effect started on 15 of March and lasted until 19 of May. 64 days in total. The average decrease in annual mileage during this period was 31%.
To be able to do the forecast, we should know what happened next.
In the next weeks in the United States, drivers increase the number of miles traveled, and until the beginning of September, the average increase was 33%. So for the US market, we already can see that the chance to increase the annual mileage by the end of the year is higher than decreasing it.
The same thing happened to the German market. Until September, German drivers increase the number of kilometers driven by 37%.
So for both countries, we can see that the fear of using public means of transport is winning.
These are good signs for the automotive market both for sales and aftersales. The aftersales market will gain more services and parts sales, especially wearing parts like brake pads and discs, filters, and oil changes. The sales market can also have advantages that now, a car is not only a means of transport but mean of safe transportation, which allows reducing public contacts. In some countries like China, we already can see an increase in car sales for 5 months in a row. In other countries, we can see even a shortage of new cars, like in Russia.
So there are the signs that finally, COVID19 will be positive and boost the automotive market.
Best regards,
Alexander Gruzdev