SANTA CLARA, Calif. –
Frost & Sullivan’s recent analysis considered the impact of the pandemic on the automotive sector under three scenarios — gradual containment, severe pandemic and global emergency —resulting in outcomes ranging from steady recovery to recession.
Under the severe pandemic scenario, Frost & Sullivan concluded that OEMs will try to capitalize on China’s early recovery from the pandemic, while overall economic relief measures in the U.S., Germany, France and the U.K. will provide the necessary boost to the market in the post-recovery period.
To tap into opportunities in this COVID-19 recovery era, the firm explained that industry participants should consider the following growth prospects:
— OEMs and dealers should focus on digital retailing and empower customers on their online journeys.
— With the rise of eCommerce, light commercial vehicle (LCV) leasing and rental solutions are gaining traction, especially during the pandemic.
— With increasing epidemic outbreaks (SARS, MERS and COVID), OEMs can ramp up connectivity services, emphasizing the need for health, wellness and wellbeing services within the vehicle.
— Contactless and touchless business concepts will leverage aftermarket opportunities, helping on-demand service models gain further momentum.
Frost & Sullivan arrived at those assertions though its report titled, “COVID-19 Growth Impact Assessment for the Automotive Industry, 2020.”
“Major Asian vehicle manufacturing countries such as China, Japan, and South Korea, which accounted for 40% of global vehicle production in 2019, are on the recovery curve. The other two major automotive manufacturing powerhouses, the U.S. and Germany, are expected to resume production partially by mid-June,” said Vigneshwaran Ramesh, automotive and transportation senior research analyst at Frost & Sullivan.
“Additionally, risk mitigation strategies such as offering financial flexibility and support to the entire ecosystem, including to dealers, suppliers and customers, will help OEMs of the world to revive,” Ramesh continued.
“The impact of the pandemic on the automotive sector will unlock new opportunities for other mobility verticals such as electric vehicles (EV), vehicle leasing, and connectivity solutions. EV sales will experience a medium impact as China will revive fastest from the pandemic with manufacturing plants returning to normal,” Ramesh added.
“Further, new vehicle leasing for the corporate segment is expected to sustain moderate growth, owing to the demand for greater flexibility and short-term contracts, whereas OEMs will emphasize connectivity services to enhance their revenue stream,” Ramesh went on to say.
For further information about this analysis, visit this website.