A resilient vehicle industry is preparing to fight back in modern ways
JOHANNESBURG – The motoring industry is optimistic that the country’s economic activity will increase in the next six months and more than two-thirds of industry players are of the view that it will return to pre-Covid-19 levels.
This is according to a survey conducted by Lightstone, an advisor to the automotive industry, which used its MyEcho platform to further understand the impact the lockdown had on the motoring sector, as well as the sentiment regarding recovery and activity levels expected in the short to medium term.
Mark Groch the chief operations officer (COO) at Lightstone said the results were insightful and in some instances surprising. “Even though we face an uncertain future, the industry at large is optimistic that economic activity will increase in the next six months, however 66 percent of respondents are of the opinion that it will take more than nine months for the industry to return to a ‘pre-covid’ situation.”
[GRAPH] Current and expected market activities according to survey results.
The survey results included the feedback of 635 respondents across the motoring industry including original equipment manufacturers (OEMs), dealerships and motor body repairers (MBRs). The country’s automotive industry has been especially hard-hit during Covid-19.
Current and expected market activities according to survey results
The survey also compiled positive and negative impact views on future recovery of the industry. On the positive side respondents were of the opinion that the cut in interest rates and lower fuel prices would assist the motor industry during this challenging time.
An overwhelming 86 percent of respondents specified that “reduced consumer cash flow” as a result from the pandemic was one of the most negative factors to impact the industry. Additionally, 72 percent were concerned about paying employee salaries and 52 percent were anxious regarding the availability of stock (vehicle trading) in the upcoming weeks and months.
[GRAPH1] Positive factors anticipated to have the biggest effect on future activity
[GRAPH2] Negative factors anticipated to have the biggest effect on future activity
Groch said: “One of the encouraging findings in the survey is how one third of respondents looked to online or digital mechanisms to try and mitigate the impact in the first several weeks of lockdown.
“The motor industry had begun to embrace the use of various technologies, however the lockdown and level 4 regulations resulted in the need to look at other innovative ways to embrace online purchasing.”
All over the world industries are looking at alternative measures to ensure business continuity.
According to Groch some of the positive shifts that will come from reactions to the current economic challenges will mean that industries like the motor industry will become more digitally fluent and changes to the way we purchase and sell cars in the future will accelerate.