Global Automotive Industry is Expected to Benefit from Electric Vehicle Demand

The automotive industry, which is a fundamental economic criterion for many countries, is on the frontlines of new technologies and innovation. One of the fundamental building blocks of GDP is the ever-changing automotive industry.

Customers' demand for new and low-cost features is propelling the auto industry into a new era. Environmental and safety standards imposed by governments in a large number of countries have placed OEMs in a difficult position. But for the past 3-4 years industry is facing many difficulties.

Economy Disruption Hampered the Automotive Growth Outlook

During 2018 and 2019, the global automobile sector started declining due to slowing economic activity, increased competition, a recession in BRIC countries, and stricter lending standards all contributed to a drop. Then came the knockdown blow of COVID-19 lockdowns during the first half of 2020, sending vehicle sales to new depths.

In 2020, automobile production has dropped by nearly 5% (to less than 92.2 million cars, trucks, and buses), bringing an end to a decade of growth.

Impact of SARS-CoV-2 over Automotive Production

Region wise, the US witnessed a decline of 19% in automotive production, slightly more than the global average, and produced a total of 8,822,399 cars and commercial vehicles. On the other hand, Europe, production declined by 21% on average, with major producing countries reporting drops ranging from 11% to nearly 40%.

South American production fell by more than 30% as Brazil felt the full impact of COVID, and African vehicle production fell by more than 35%. Asian automobile manufacturers performed better than other vehicle manufacturers. While automotive production on the world's largest continent declined by about 10%.

China's expedited recovery caused vehicle production to fall by only 2% over the year. Asia accounts for 57% of total global vehicle production. However, the automobile industry is recovering faster than expected, owing primarily to consumer preferences for personal mobility over public and shared transportation.

Shortage of Semiconductors

Covid-19 had a very less impact in 2021 as global car sales showed a recovery due to the vaccine rollout and subsequent vaccine campaigns, which offered a promise and favorable growth for automakers during the first half of year. In the first quarter, automakers including General Motors Co., Toyota Motor Corp., and others benefitted from robust demand for new cars and trucks compared to a year before.

Auto sales in the US increased by more than 8% during the first quarter of 2021. After the knockout from Covid-19 Automobile industry faced a new challenge “shortage of semiconductors” the improved sales figures are colliding with persistent manufacturing difficulties. The worldwide semiconductor shortage is depleting automobile and truck dealer lots. In the first half of 2021, General Motors extended the company shut down due to a shortage of semiconductor chips.

The impacted GM plants are in Kansas; Ontario, Canada; and San Luis Potosí, Mexico. They produce the Chevrolet Malibu sedan and Buick Encore, Cadillac XT4, GMC Terrain, and Chevy Equinox and Trax crossovers.

There is much more to know about the industry in terms of technology, performance, challenges and competition, therefore Makreo Research and Consulting has come up with a descriptive report on Global automotive industry.

The report published by Makreo Research and Consulting Firm, titled “Global Motor Vehicle Production and Demand – Regional Performance in the Wake of COVID-19” is a comprehensive study that assesses motor vehicle market in North America, Europe, APAC and Latin America.

The report further deep dives into assessing the market by type of vehicles including Passenger vehicles and commercial vehicles. In terms of region, the report study North American market covering the US and Canada; Europe market covering Germany, Spain, and France; Asia Pacific region by covering China, India, Japan and Latin America market by covering Brazil, Mexico, Chile, Colombia and Argentina.

The report also helps to understand industry performance before and after the virus outbreak. Report discusses key players' performance and their positioning in the market. Market drivers and retardants have also been presented in the report.

To know more about the research report, click on the link below:

Global Motor Vehicle Production and Demand

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