The COVID-19 pandemic stalled the automotive industry for a period of time, but vehicle sales overall have largely rebounded. Now—with cases at an all-time high in the US—dealerships, mechanics, manufacturers and others in the industry may face heightened in-person restrictions. As we head into 2021, are auto industry pandemic restrictions ramping back up?
For manufacturers, PPE is keeping the line moving
Auto industry pandemic restrictions are still affecting manufacturing plants. Workers wear masks and gloves, use hand sanitizer and regularly wash hands and surfaces. However, the fact that they’re manufacturing at all is a big improvement from earlier in the year.
Travel restrictions are a form of auto industry pandemic restrictions, too
Many states are imposing heightened travel restrictions again (or still). As of Sunday, November 29, states like Alaska, California, Connecticut, Maine and Pennsylvania had some sort of travel restrictions in place. This affects the need for new vehicles as well as the need for automotive service.
The industry is competing with its own record highs
Before the pandemic, car sales and service were way up. Projected auto sales for The US in 2021 were upwards of 17 million vehicles. It’s hard to compete with this in any era, let alone one that brings a major economic demand shock.
This switch in demand led to layoffs everywhere. Nissan is just one example. They had to close its Barcelona plant after severe profit losses. Meanwhile, every country has its own set of pandemic restrictions, whether for the auto industry or otherwise. That makes importing, exporting and doing overall business far more difficult.
By the end of the first half of the year, vehicle sales within America fell by nearly a quarter compared to 2019. During the summer of 2020 was also when restrictions began to ease across the States.
While the US is still trying to crawl back to where it was before, China’s automotive sales have kept great momentum. Meanwhile, Tesla zoomed past Toyota to make the Elon Musk-led company the most valuable auto business there is.
Will auto industry pandemic restrictions lead to an EV focus?
According to the International Energy Agency, 2.3 million electric vehicle sales could have been sold by the end of 2020. We’re still waiting on whether that estimate stacks up in real time, but it’s a record number that beats the year prior. The sector could be the driving force behind post-COVID economic growth.
Christian Bold, head of product management for BMW i and Electromobility BMW, says about BMW’s EV efforts, “It’s not a change of mind. It’s maybe a change of speed.”
Bold says we can expect 15–25% of all our cars to be electrified by 2025.
As for what that has to do with pandemic restrictions for the auto industry, it’s this: While we may see heightened or prolonged restrictions in the sector, it’s possible this same thing could drive growth in a brand new way. Right now, it’s just an opportunity, but one that we could very well see take shape.