Covid-19 has caused a bigger one-off shock in car sales than the global financial crisis. Picture: REUTERS
Covid-19 has caused a bigger one-off shock in car sales than the global financial crisis. Picture: REUTERS

The world’s light vehicle market is forecast to decline 17.2% to 73.6-million units in 2020 due to the Covid-19 pandemic and its associated economic fallout, said GlobalData, a data and analytics company.

“This is a bigger one-off shock than witnessed in the two years of the global financial crisis,” said Calum MacRae, automotive analyst at GlobalData. 

GlobalData’s analysis suggests that the damage to the global market will turn out to have been most acute in the second quarter of 2020, when strict lockdown measures were in place worldwide.

“GlobalData’s forecast sees Q2 [quarter two] about 34% down on last year’s pace and way below the 2008 Q4 low point reached during the last big global downturn,” MacRae said.

“However, vehicle markets are on the turn as we get into the second half of the year. China was first into the crisis and was first out. China’s light vehicle market was up 8% in May and South Korea’s was up nearly 10%. In Europe we’re seeing some improvement to vehicle markets now, too, helped by government subsidies for new vehicle purchases.” 

In SA, year-to-date new passenger car sales are down 34.8%, light commercials have dropped 42.6%, medium trucks 32.1% and heavy trucks 28.3%.

Compared with June 2019, passenger car sales dropped 33.4% to 9,667 units, light commercial vehicles declined 29.7% to 10,189 units, and medium trucks dropped 26.6% to 611 units last month. Heavy trucks and buses bucked the trend by gaining 6.5% to 1,803 units compared with the same month last year.

Analysts are predicting a local new-vehicle market decline of 20%-50% for the full year.

The National Treasury expects SA’s economy to shrink 7.2% in 2020, its largest contraction in almost a century.

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