The damage caused by the pandemic will take several years to return to normal and recuperate. This applies to whether we are talking about society, the economic or political setup across the globe.
Different segments in the automobile industry have been affected by the ongoing pandemic. As per a recent survey, around 2/3rd of participants in the survey believed that there would be deferred deployment as far as technology is concerned among the various adverse effects that can be cited.
A Decline in Auto Sales
During the earlier days of the pandemic, automaker stalwarts like Ford and General Motors had ceased manufacturing vehicles and instead of manufacturing ventilators to meet the escalating demands after the US government directed it to do so.
According to market estimates, the global auto sales figures are slated to nose dive by as much as 22%, which will take the figure sales to roughly 70 million and not 90 million.
And as far as the scenario in the United States is concerned, it will be worse. The sales figure, it is being anticipated, will touch the 12.5 million mark instead of the 17 million mark, which accounts for a decline of approximately 26.6%.
The decline will adversely impact the chipmaker industry, and consequently, there will be a delay in technology when the question of chip deployment in new vehicles arises.
Incorporating Automobile Vehicle (AV) functionality
When the pandemic did not hit the globe yet, some of the AV firms had decided to roll out Level 5 SAE or Society of Automotive Engineers functionality for cars that would have been produced in the near future within a stipulated time frame that was reasonable and agreeable.
However, with the prevailing condition in the market, rolling out Level 3 functionality in the newly manufactured vehicles seems difficult.
And the delay in incorporation of the newer technologies is unlikely to take place earlier than 2021.
Decline in auto sales and loans
Since the pandemic has caused job losses and the instances of rising unemployment are quite high, the payment for the existing auto loans might increase defaults. Although title loans can be used for clearing your loans to some extent. Moreover, it allows you to keep your car even as the title of your vehicle is used as a collateral. This makes such loans more appropriate to borrow during a pandemic.
However, you will witness a more significant number of loan defaults and negotiations across the table with the creditors. Given that social distancing is one of the prime aspects that you must keep in mind, these negotiations have to be done virtually, which again raises the concern about how fruitful they will be.
If you can afford to make your monthly auto loan payments by curtailing unnecessary expenses, you must always do so. This financially responsible behavior will also reflect in your financial report card (credit report), which will eventually improve your credit score in the long run.
Decline in sales
Since the people’s purchasing power has gone for a ride due to unemployment and lay-offs, the number of people investing in new vehicles has declined. It will continue to do so at least till the time things do not get back to normal, and most importantly, the social and economic setup does not improve.
Robo-taxis in future
Many automobile experts believe that if Robo-taxis are introduced, the chances of spreading the virus or transmission will reduce remarkably. However, it is just a concept that is being thought over by a few experts. It is a distant possibility for their deployment or development and manufacturing as yet.
