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Auto events cancelled across world over COVID-19 virus concerns
13 March 2020
Following the World Health Organization (WHO) classifying the
coronavirus disease 2019 (COVID-19) virus outbreak as a pandemic,
there are increasing numbers of near-term automotive industry and
consumer events being cancelled or postponed in North America and
globally. This article discusses several of these, but they are not
intended to be an exhaustive list. The situation remains extremely
fluid.
Among the announcements of auto-industry events being cancelled
or postponed on 12 March were the Vancouver International Auto Show
(postponed, originally scheduled for 25 to 29 March 2020, no new
date selected) and the Mid-America Trucking Show (cancelled,
originally scheduled for 26 to 28 March 2020). The Vancouver event
does not typically carry a high number of new-vehicle reveals, but
the importance of regional shows to local area car sales remains
significant. At the time of writing, it is unclear how truck makers
will readjust and communicate the news that had been planned for
the Mid-America Trucking Show, which caters to the heavy-duty
trucking sector.
In the racing world, many series are cancelling races or closing
them to spectators. The World Endurance Championship (WEC) has
cancelled the 1000 Miles of Sebring race scheduled as part of a
double-header weekend on 19-21 March, in part necessary on the US
ban on travel from 26 European countries announced on 11 March. The
FIA Formula E season has been postponed until further notice and
the first two MotoGP races of the new season have also been
postponed. The Formula 1 season opener in Australia has been
cancelled, after McLaren pulled out after a team member was
diagnosed with COVID-19 disease. The F1 race scheduled for Bahrain
on 22 March may still go ahead, but without spectators. In
February, F1 postponed the Chinese Grand Prix, which had been
scheduled for 17-19 April. The National Hot Rod Association (NHRA)
will go forward with its scheduled event in Florida on 12-15 March,
including allowing drivers to mingle with fans. IndyCar will go
ahead with its season opener, the St Petersburg Grand Prix, to be
held in St Petersburg, Florida, on 15 March, although closed to
spectators and open to limited essential personnel only, so on for
TV audiences only. The Acura Long Beach Grand Prix, scheduled for
19 April, was cancelled after the mayor of Long Beach, California,
took the decision out of the organisers' hands with a city-wide ban
on large events through the end of April. The IMSA's 12 Hours of
Sebring event, originally scheduled for 18-21 March, has been
postponed to 11-14 November. NASCAR has announced that the next two
scheduled races, at Atlanta Motor Speedway in Atlanta, Georgia
(scheduled for the weekend of 13 March), and Homestead-Miami
Speedway in Florida (scheduled for the weekend of 20 March), will
go on as scheduled, although like IndyCar and the F1 race in
Bahrain, they will be limited to essential personnel only and run
without fans in attendance. As for the rest of the season, NASCAR
said, "We will work with public health officials as we determine
future scheduling beyond these events."
In addition, nearly all US-based new-vehicle media drive events
have also been cancelled. Automakers cancelling drive events
include General Motors (with Cadillac, Chevrolet, and Buick
programmes being affected), BMW, Porsche, Hyundai, Volkswagen, and
Jeep. These events are timed to coincide with when the vehicles go
on sale, and automakers rely on them to help generate buzz and
interest in new model launches. Most of the drive programmes are
not being rescheduled; these vehicles will go on sale without the
benefit of a media blitz from independent reviewers. Automakers
have also cancelled a series of product reveals planned for outside
of the postponed New York International Auto Show, although some
automakers are moving forward with smaller reveal events. The
events that have been cancelled include Hyundai's planned reveal of
the 2021 Elantra sedan and Cadillac's planned reveal of its Lyriq
electric sport utility vehicle (SUV). Automakers which had planned
reveals at the New York auto show are looking at alternative plans
for those events, with most presumed to be virtual ones. However,
unlike the 2020 Geneva Motor Show, which was cancelled only days
before the event, automakers are rethinking the time and location
of those product reveal events. In the case of the cancelled Geneva
show, most automakers held virtual events during the same time slot
that they had been given for the show. This was an expedient
solution. In the case of the New York show, the announcement of the
postponement happened weeks ahead of the show and before a final
press conference schedule had been made public. As a result, the
automakers have had more time to develop a secondary plan that is
more effective for specific programme goals. Nissan, Honda, and
Acura have confirmed that they are considering their options, and
are looking at dates other than the previously planned April New
York media show dates.
Outlook and implications
As the world is working to contain and react to the COVID-19
virus spread, and the World Health Organization (WHO) now
classifies it as a "pandemic", some of the non-production impacts
on the automotive industry include cancelled racing events, auto
shows, and various vehicle drives and reveals. The changes will
have an impact on automakers' bottom lines, as investment has been
made in these near-term events and cannot be recouped easily.
Changed plans for product reveals will have impact on automakers'
expenses, but also on go-to-market plans for new products that have
been in development for years.
Product reveals are scheduled to coincide with a given
automaker's plans for the market launch of vehicles. However,
delaying those events alone does not delay the start of sale or
production of the products and the need for a marketing launch does
not change. With the trucking show being cancelled, too, this
affects both light and medium-heavy commercial vehicle players. As
a result, automakers are faced with not only losses related to
event expenses, but also plans for marketing launches will need to
be reworked, and some vehicles may end up seeing much softer
launches than planned, which could affect their initial sales
performance. In terms of the importance of these, an OEM's top
public relations executive stated to IHS Markit that there is only
one shot at making a first impression, and that a virtual reveal
may lack the impact and excitement of a real-world reveal of a
vehicle. A virtual reveal may be the only alternative in the
current climate, but it is not seen as ideal by the public
relations executives we have spoken with. The decisions on an
alternative course of action will be taken carefully.
Delaying vehicle drives and product reveals has a different
impact from potential production disruptions or quarantines that
keep people at home and close all but essential businesses, and in
some ways, the impact may be more difficult to measure. Some of the
activities can be rescheduled, but there is a cost in lost
opportunities as well. In addition, automakers already had plans
for the rest of 2020. Delaying a programme or reveal of something
today may have a knock-on effect on marketing plans in the second
half of 2020. Although there are, at the time of writing, few
quarantined areas in the United States, several cities are either
banning large events outright or strongly suggesting they be
cancelled. Still, under current conditions, most dealerships remain
open and consumers are able to purchase vehicles. As the situation
escalates, some consumers may be deterred from car-shopping even
though dealerships remain open.
The racing event postponements will also affect the bottom line
for manufacturers which were going to participate, although the
impact will not be as direct on consumers' immediate buying
behavior, and the decisions on whether to race are taken by the
racing organisations. In the longer term, the cancellations and
postponements affecting the sport of racing are not likely to have
as notable an impact as those affecting other auto sectors.
Certainly, there remains the risk of more manufacturing delays
as the COVID-19 virus outbreak progresses; if a supplier or
assembly plant of one of the delayed products is impacted, this
will also affect market launches. Fiat Chrysler Automobiles (FCA)
is the first automaker in the US to announce that a worker at an
assembly plant has tested positive for the COVID-19 virus. At the
time of writing, production at FCA's Kokomo, Indiana, plant is
continuing, although the worker and those who worked near him or
may have come into contact with him have been put in home
quarantine. FCA is also the hardest hit by Italy's quarantine,
although VW's Lamborghini brand announced on 12 March that it will
close its Italian plants until 25 March.
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