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.