Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
To say the least, 2020 was an unprecedented year for
the automotive industry. COVID-19 has accelerated developments in
the vehicle buyer journey that are sustainable beyond the first
year of the pandemic. Some companies were better positioned than
others to take advantage.
The year 2020 was an unprecedented year in terms of global auto
sales. Demand for new vehicles decreased 15%, to 73.8 million
units, in 2020 as a result of the COVID-19 pandemic. An estimated
USD355 million's worth of revenue stemming from sales of new
vehicles had vanished. As COVID-19 spread, IHS Markit released an
interactive dashboard called "Global Auto Demand Tracker", allowing
clients to quickly take the pulse of automotive sales — the
heat map below shows year-over-year growth by country (2020 vs
2019).
Mainland China: Volumes sharply declined, plunging to a
seasonally adjusted annual rate (SAAR) of just 5.3 million units in
February 2020, down from 20.7 million units in January 2020. As of
May, the SAAR had somewhat recovered, trending at a
22.1-million-unit rate for 2020.
While demand in mainland China was convalescing at a remarkable
pace, other key automotive markets were still under lockdown,
making a strong market position in mainland China paramount to
recovery. In 2020, mainland China's share of global auto sales
compared with the rest of the world increased from 27% to almost
30%.
Winners of the crisis in mainland China in market share growth
were volume brands, such as Chana, the joint venture of
Toyota-Guangzhou, Wuling, and Great Wall. Equally noteworthy among
the top-10 OEMs in terms of market share growth were premium brands
such as Tesla, Hongqi, and the joint ventures of BMW-Brilliance,
FAW-Volkswagen's Audi, and Beijing Benz's Mercedes, as the growing
upper-middle-class Chinese consumers were turning to premium
offerings.
The share of new energy vehicles (NEVs), such as
battery-electric vehicles (BEVs), plug-in hybrid electric vehicles
(PHEVs), and fuel-cell vehicles, increased from 4.2% in 2019 to
5.5% in 2020. Specifically, NEVs were up in November and December
2020. To support the domestic automotive industry, mainland China's
NEV subsidy scheme was extended to run through 2021 and into 2022,
although with tightened technical criteria for eligibility.
United States: Volumes were significantly under pressure during
the pandemic. In April 2020, volumes were trending at a SAAR of
just 10 million units. For the full year, volumes likely dropped
15.8%, to 14.2 million units, versus 2019. However, the reduction
of the federal interest rate and the rollout of the largest
stimulus program in history point to signs that the market is
poised to start recovering once vaccinations start to ramp up. The
widespread adoption and potential continuation of work-from-home
schemes for much of the white-collar industries raise the question
if there will be a permanent shift in the market dynamics after the
crisis.
In terms of electrification, the pace of transition to
e-mobility in the US has not been as significantly accelerated as
it has been in Europe. There have been introductions of new models
from volume manufacturers, such as Ford with its Mustang Mach-E,
into what has been until now a segment dominated by Tesla.
The COVID-19 crisis resulted in not only economic conditions
affecting customer demand for new vehicles, but on top of this also
physical conditions restricting the traditional vehicle purchasing
process and hence sales globally. Some automakers were in a better
position to limit the damage directly from the start of the
outbreak. Tesla adapted to the situation by offering touchless test
drives as a "new default for zero-contact experience", introducing
this concept first in mainland China and now across the globe,
helping to build consumer trust in this period of uncertainty.
Many traditional automakers have also reacted swiftly to help
position themselves for a better recovery, with Stellantis's Drive
Forward initiative now offering North American customers the option
for a completely online retail experience, from trade-in to credit
application, and approval to home delivery. The crisis has led to a
new definition of the vehicle buyer journey across the globe, with
ease-of-access, ease-of-purchase, and digital-first retail now at
the forefront of many automakers' strategies.
Europe: Central and Western Europe were among the hardest hit
regions globally, as vehicle demand reduced by 4.3 million units,
to 13.8 million units. Three-quarters, or 3.1 million units, of
that loss were incurred by the European Big 5, notably Spain
(-31%), the UK (-28%), Italy (-27%), France (-24%), and Germany
(-19%).
In midyear, various stimulus programs and incentives were
launched in, for example, Germany, France, Italy and Spain. Aimed
at spurring xEV adoption, these incentives helped to accelerate
demand for electrified vehicles in the second half of the year.
December 2020 was somewhat distorted by OEMs' own registration
activity in a final push for carbon dioxide (CO2) fleet compliance
targets.
Tesla did well in 2020 in Europe, with strong UK and European
demand. However, the BEV space is becoming increasingly crowded,
with more European brands going to market with their own
offerings.
