Lost demand is biggest issue for automotive restarts, says GlobalData

Following the news that vehicle manufacturers in Europe hit by the COVID-19 crisis are tentatively planning manufacturing plant restarts;

Mike Vousden, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:

“As countries gradually bring the rate of infection under control, the calls to restart economies and open up factories again naturally grow louder. Car companies and their major suppliers have very tentatively begun to restart their European production networks.

“However, if stay-at-home orders remain in place across Europe, consumers will be unable to go to dealerships in the first place, drastically reducing the demand for vehicles.

“Growing signs of an imminent sharp economic downturn will also dent demand.

“Passenger car sales in the European Union (EU) in March plunged 55.1% as a result of the COVID-19 outbreak.

“April’s drop will be even larger and the collapse of the vehicle market and the volume shortfall for manufacturing remains the biggest problem the European industry faces in the short-term.”

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