Are People Buying SUVs And Electric Cars During Coronavirus?
At a time when traveling on public transport is pretty risky as it increases the chance of coronavirus infection, one must be wondering how the sale of SUVs and electric cars is faring?
Although the world is covered with travel restrictions, people still need to move within their cities. More importantly, they want cheap private transport that’ll keep them isolated from the masses. So, the need for car ownership has never held the utmost importance as it does now.
Coronavirus is a pandemic, comparable to the Spanish Flu of 1919, but it has the same economic impact as the 2008 global recession. At the same time, drawing comparisons to both of them to understand the future auto industry trends is entirely worthless.
In 1919, when the Spanish Flu ravaged across daily lives, the idea of a global automotive supply chain wasn’t around. And in 2008, when the financial crisis hit the global economy, daily lives were still functioning as usual.
Are People Buying Cars During Coronavirus?
SUVs are the dominating vehicles in 2020. Signs of a growing economy and lower gas prices have led to the rise of SUVs, up to the point where every automaker has some sort of CUV, cross-over, or mini SUV in its portfolio.
That’s about to change when the demand for owning cars has been stripped off of its luxury factors and is down to its practical appeal.
However, this trend is apparent in some regions, but not so much in others. For example, in Japan, Toyota is revising production plans due to low demand but is planning to continue the production of RAV4 and Corolla in the United States.
Car sales are already taking a toll, with about 80% fall in car sales in China and 11% in Germany. Earlier issues faced by the auto industry was mostly supply chain disruption, but it has recovered from the crisis.
At present, consumer confidence is at an all-time low. The cause of low consumer demand may point towards their small spending ability, but as we look closely, the real reason unravels.
According to recent data from Cox Automotive, even though dealerships are seeing less foot traffic, the online sale of cars has seen an increase. Nearly 37% of the customers, intending to buy a vehicle in 6 months, are now less likely to visit a dealership in person.
Furthermore, according to J.D. Power, 23 U.S. states that represent 51% of sales, observed car sales either through online and or remote deliveries. This figure is more than the 41% of sales in other 24 states that allow dealerships to remain open.
Additionally, Tesla also saw a record number of deliveries in March in China. Since the start of April 2020, Tesla stock has jumped three times over 17 days.
According to recent data revealed by LMC Automotive, an industry analyst, there was a massive 450% increase in Tesla sales in March. Following the news, Tesla stock jumped another 28%.
Electric Cars Or Conventional Ones: Who Triumphs?
Several analysts predicted that sales of electric cars could see a downturn during the Coronavirus pandemic. But as we saw in the above real-world situation, this statement turned out to be false.
The popularity of electric vehicles has been growing steadily even before the pandemic disrupted auto sales and manufacturing.
So the demand for vehicles will follow the same pattern as it did in the long run. Coronavirus might have changed consumer behavior for a while, but they still have the same expectations. And the auto industry will reflect the same in the coming months.
