The automotive industry has been hard hit by the Corona crisis. Experts expect a massive drop in sales figures. Automotive market analyst Ferdinand Dudenhöffer has made a forecast.
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Experts expect a minus of 18 percent for the international automotive market – things are going to get worse in Germany. State aid alone will not help the industry much. The second big problem can only be solved by yourself.
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DVehicle sales in the international automotive market this year could be a total of 18 percent below the 2019 level as a result of the corona pandemic. The total global sales would therefore only be around 65 million cars. The automotive market analyst Ferdinand Dudenhöffer from the University of St. Gallen expects this.
According to the forecast, all major automotive markets will shrink in the double-digit percentage range. France and Italy are the worst affected, with a drop of 25 percent each, Spain with 22 percent and Germany, the United States and Mexico with 20 percent each. For the world’s largest automotive market, China, Dudenhöffer expects vehicle sales to decline by around 15 percent.
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He sees a particular problem for the European automotive market, which is also a core market for the German automotive industry. “In our estimation, there are two million vehicles overcapacity in the car market in Europe with car manufacturers and suppliers,” said Dudenhöffer WELT. He expects sales of 13 million vehicles in Europe this year and an increase to 14.6 million cars by 2025. For comparison: in 2019, 15.8 million cars were sold in the European market.
The overcapacity could burden the industry, but also the public sector, for years to come. “Debt reduction is slowing future growth in Europe,” says Dudenhöffer. “High levels of debt, high outstanding central bank loans, little growth potential describe the situation of the EU in the next ten years – if you like, the post-corona crisis.”
Reduction of excess capacity is essential
According to Dudenhöffer’s assessment, the Asian market will recover faster than the European and North American ones. According to the calculation, vehicle sales in Asia in 2025 could be five percent above the level of 2019 – in North America, however, by two percent and in Europe by eight percent below the sales volume of the previous year. The faster recovery in Asia is attributed primarily to the lower market saturation in China compared to Europe.
Dudenhöffer believes that a structured reduction of excess capacity in Germany and Europe is essential. The federal government has so far supported the automotive industry with general instruments – above all with the payment of short-time working benefits for the more than 200,000 automotive workers in the closed German factories of manufacturers and suppliers, as well as with state-secured Kfw loans for small and medium-sized companies.
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“You have to think about the general government aid and liquidity packages,” says Dudenhöffer. “Today’s watering can method has major economic side effects. First, the debt rises, making the catch-up process longer. Secondly, you lose time to adjust the economy to the changing market conditions. “
In his view, the most important thing is to boost the demand for automobiles and at the same time to drive structural change in the industry – be it with increased government aid for the expansion of electromobility, especially with the expansion of the charging infrastructure, or with new business models Automobile manufacturers such as car subscriptions. According to Dudenhöffer’s assessment, subscription contracts with short terms and return rights for automotive customers could help stimulate vehicle sales at short notice despite growing economic risks for customers.
Production starts again in May at the earliest
With around 830,000 employees, the automotive industry is the key sector of the German economy for vehicle manufacturers and suppliers alone. There are also automobile dealers, service companies, vehicle insurers and much more.
In a joint appeal, associations of the automotive industry and the IG Metall trade union on Maundy Thursday pointed out what they saw as the “increasingly threatening situation among manufacturers, suppliers and the trade with a total of around 1.3 million employees in Germany”: “There are tapes silent, salesrooms must remain closed, vehicle sales have almost completely come to a standstill. “
Automobile production in Germany is expected to start again in May at the earliest. In addition, the stationary automobile trade, which is currently closed nationwide, must be able to work again by then. The trade is faced with a “barely manageable amount of pre-financed warehouse vehicles”, which due to the orderly closure of its sales outlets should no longer be sold stationary, according to the joint statement of the automobile associations and IG Metall: “Companies can even more vehicles do not record. This means that delivery and production come to a standstill or cannot be started again. “
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It is still unclear whether the federal government will and will help the automotive industry with special measures after the peak of the corona pandemic. Vehicle manufacturers such as BMW and Volkswagen are now proposing “innovation bonuses” from the state to boost car sales, especially for the purchase of low-emission vehicles. There are already so-called environmental premiums for the purchase of electric vehicles and cars with hybrid drives.
The German Association of the Automotive Industry (VDA) has so far not required such specific measures. “We need a whole bunch of measures to get this crisis under control and get the economy going again,” said VDA President Hildegard Müller at the end of March. “I will ask for the appropriate measures when the time is right.”
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