Global light vehicle sales reached their lowest point since 2012, driven by the emergence of COVID-19.
Figures for units sold in January reached 6.2 million, the lowest monthly figure since January 2012, which saw 5.9 million units sold, according to GlobalData, a leading data and analytics company.
The coronavirus has spread rapidly and has already infected more than 198,177 across the world as of publishing. This has created a knock-on effect for both vehicle sales and production, with dealerships devoid of customers and factories at a standstill with no one to operate them.
“While the drop in January vehicle sales on a global scale is alarming, sinking 13.9% compared with the same month in 2019, it is positively disastrous in China itself,” Mike Vousden, Automotive Analyst at GlobalData. “Sales in the world’s single largest vehicle market sank 33.1% compared with January 2019 to just 1.66 million units. Adding insult to injury is the fact that January 2019’s figure was already 8% down on the same month in 2018, following a decade-long period of strong increases.”
Anecdotal reports are already indicating that sales declines are likely to accelerate into February. Domestic sales are said to be down 96% in the first week of February compared with the same period one year earlier.
“The longer-term effects are difficult to quantify but it is likely that sales growth will continue to be stunted throughout the rest of 2020, even if the spread of COVID-19 can be contained,” said Vousden. “This is because many of the components that go into building vehicles all over the world are produced in China, in factories that are currently standing still because it is too risky for workers to return. The auto industry is poorly prepared for such supply chain shocks because many operations run on a ‘just-in-time’ basis, with very limited numbers of stockpiled parts.”
These sudden drops in sales across the largest vehicle markets have, understandably, led to a significant drop in the seasonally adjusted annualized rate (SAAR) of sales for 2020. Global vehicle sales SAAR stood at 88.5 million in December 2019 but, just one month later, sank 10% to 79.7m.