How COVID-19 has had an impact on the car industry

By Hari Rathakrishnan

COVID-19 has had a massive impact on industries all over the world. These include the car, beauty, cinema, tourism, transport and hotel industries. I am going to focus on a particular industry: the car industry. So, what is it that is so powerful about COVID-19 that it plunges profits of international retailers into an abyss?

The lockdowns that have occurred all around the world are one of the main reasons for this. A huge part of the population of countries are often forced to stay in, with prosecutions for protests. People are given the choice to buy cars online, but what is the use of a car if you’re rarely going to use it? An example of this is shown through the profit of Volkswagen AG. In 2019, the profit came in at about 16.8 billion pounds, a wonderful milestone in the company profits. In 2020, the profit declined to 8.7 billion. This was almost 50 percent less profit and it was 500 million pounds less profit than 2014.

Some companies, however, are soaring in sales. For example, Tesla made nearly 500,000 vehicles in 2020. This is a huge number, and highlights Tesla’s influence over the electric car market. It did mean that Tesla made a loss, but not a big one, like Volkswagen. Reasons why the electric car market may be booming could be as some groups believe that our misuse of planet Earth could be the reason for the Corona virus.

Here are some reasons why people have stopped buying gasoline powered vehicles. 1. It could help clear away the effects of our carbon footprint. 2. It may also be cheaper to not have to maintain a car during lockdown. 3. It may also save lives, by people not breathing in the carbon dioxide emitted into the atmosphere. Driving a car is also found to be quite stressful with many drivers worrying about the possibilities of an accident.

We can see from this article that the coronavirus is a huge threat to all car companies, especially small ones. They could be endangered by the lack of customers or staff. As the coronavirus continues to build fear amongst many people, the customers may be so worried about their own survival that many car companies like Volkswagen and Toyota, both of which are super giants, may collapse.