The Impact of COVID-19 on the European Automotive Market

Learning from past crises, future market outlook and recommended actions for OEMs

The European automotive market is on its way out of the lockdown period. Most dealers have reopened their showrooms and manufacturing plants have restarted their production at selected locations, or are planning to do so in the upcoming days. In April 2020 new car registrations of major European markets reached their lowest level since World War II. The preliminary sales figures for May 2020 show a modest rebound effect generated by pent-up demand and confirm that the crisis goes beyond the restrictive measures imposed by the lockdown.

The crisis is rather due to the negative sentiment around the demand side as confirmed by the collapsing consumer confidence index in all European markets. Most of those who were intending to buy a car before the crisis are now undecided and it is likely to take several months before the market makes a full return.

The previous crises can help predict the impact that the pandemic is likely to have on the different lines of business, countries and market players. Yet this is a one-of-a-kind crisis, with demand trends being mostly unpredictable as driven by health and safety concerns in addition to the effects due to the economic turmoil.

We can not expect things to change if we keep doing the same things. The crisis is the best blessing that can happen to people and countries, because the crisis brings progress. [...] It is in crisis that invention, discovery and large strategies are born

The crisis according to Albert Einstein

During these days, automotive trade associations are calling for vehicle parc renewal incentives to kickstart economic recovery. State subsidies can mitigate the impacts of the pandemic in the months to come, yet they do not tackle the fundamental issue of the innovation gap characterizing the automotive retailing Carmakers and dealerships have to rethink their existing sales strategies and make critical decisions in a very compressed timeframe.

How will the market evolve in the next months? How purchasing behaviors are changing? Which capabilities need to be developed right away to meet emerging customer needs?

These are the key questions addressed by our Report, which aims at providing carmakers and their national sales companies with pragmatic recommendations on how to best manage the post lockdown period.



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Francesco Papi

Francesco Papi

Associate Partner, Strategy& Italy

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