Automotive Takes a Beating as Sales Slump Thanks to COVID-19
Thanks to a global pandemic and, in the UK’s case, Brexit, automakers around the globe are taking a pummeling. Although the numbers are bleak, fourth-quarter sales brought some improvements and the hope for days, assuming a successful vaccine rollout.
“I am as optimistic as one can be,” said Scott Keogh, president and chief executive of Volkswagen of “What is weighing on everything is how quickly can we get those shots rolled out.”
- The UK auto industry suffers the largest new car sales drop since 1943. British new car sales fell nearly 30% last year in their most significant annual drop since 1943 as lockdowns to curb the spread of the coronavirus hit the sector, an industry body said on Wednesday.
- In Japan, auto sales fell 11.5% last year, marking the country's biggest drop since 2011. Toyota Motor Corp. a 5.8% YoY drop in domestic sales in 2020. However, their competitors faired much worse. Nissan Motor Co. took a 27.5% slump while Mitsubishi Motors Corp. reported a 41.3% drop.
- The National Federation of Automotive Vehicle Distribution (Fenabrave) stated on Tuesday, January 6, new car sales in Brazil dropped 26.16 per cent in 2020 compared to 2019, the worst yearly record since 2016.
The Bright Side
In the US, , and foresee possibly strong growth in the second half, as they roll out a parade of new sport utility vehicles, pickup trucks and electric cars. Those hopes rest in large part on the expectation that the distribution of Covid-19 vaccines will accelerate this spring and summer after a slow start in recent weeks.
- Analysts estimate the US sold 14.5 million cars and light trucks last year. That calculates to a 15 per cent deterioration from 2019, and the lowest level since 2012, when the industry was still recovering from the financial crisis.
- In what seems to be another hopeful sign for a better 2021, some fourth-quarter sales faired a little better compared to the same period last year.
- GM, who reported a 12 per cent drop in 2020, saw a .
- Toyota Motor Corp and Fiat Chrysler Automobiles NV also said their pace of sales in the fourth quarter accelerated in the final quarter.
- The viewpoint for 2021 shines a little brighter for Brazil as well, with a prediction of 16 per cent expansion in new vehicle sales, the main Latin American economy, stated The National Federation of Automotive Vehicle Distribution (Fenabrave)President Alarico Assumpcao Junior in a video press meeting.
“We look forward to an inflexion point for the US economy in spring,” GM’s chief economist, Elaine Buckberg, said in a statement. “Widening vaccination rates and warmer weather should enable consumers and businesses to return to a more normal range of activities, lifting the job market, consumer sentiment and auto demand.”
Although it is said that hope is not a strategy for success, let’s hope.
Canoo Awards Manufacturing Contract to VDL Nedcar
Canoo, a trailblazing company in the electric vehicle (EVs) manufacturing industry, has officially announced owned and contract manufacturing plans that will ensure the company manages to deliver on its promise to consumers of production and delivery of vehicles in Q4, 2022.
During the company’s first Investor Relations Day, Chairman & CEO of Canoo, Tony Aquila, named VDL Nedcar as its contract manufacturing partner. VDL Nedcar, which I’m sure many of you will already have heard of, is the only independent Vehicle Contract Manufacturer in the Netherlands and has enjoyed fifty years of growth under owners, including Mitsubishi Motors and Volvo cars. According to the report, Nedcar will manufacture the Lifestyle Vehicle for the United States and European Union markets, while Canoo builds a US-based mega micro-factory.
"We conducted an exhaustive search, invested significant amounts of time and resources that span the globe, in our search for our Phase 1 contract manufacturer. VDL Nedcar is the right partner," said Tony Aquila, Investor, Chairman and CEO of Canoo, Inc. "They are the top trusted European manufacturer building high-quality products for leading OEMs, and they significantly outcompeted the other contenders. VDL is also independently owned by the van der Leegte family of entrepreneurs - which aligns with our commitment to support businesses that form the backbone of communities. This strategic partnership will enable us to deliver vehicles to market while we build our Phase 2 factory in Oklahoma. It also strongly positions us for geographic expansion in Europe and builds a lasting relationship with VDL Groep of companies. Our investment will help us scale quickly and fulfil our mission to bring affordable, purpose-built EVs to Everyone."
Canoo and VDL have already gotten to work on vehicle manufacturability and production planning so that Canoo can successfully lay the groundwork for its upcoming US manufacturing operations expansion, which will be completed in Oklahoma in 2022. The Nedcar facility currently expected to produce around 1000 units for both the US and European markets in 2022, with an additional 15000 targeted for the following year.
"Canoo's bold approach to designing and building electric vehicles makes them an ideal partner as we work together to shape the future of mobility," said John van Soerland, CEO of VDL Nedcar. "This partnership advances our strategic vision to provide a contract manufacturing solution and expand our expertise in the EV arena."
Currently, Canoo is entering its GAMMA phase of development and is on track to start production soon. The company intends and expects to launch its Lifestyle Vehicle in Q4 2022, closely followed by the Multi-Purpose Delivery Vehicle and Pickup Truck.
Watch this space.