The Impact of Covid-19 on the Auto Industry

Posted by: Lydia on 30/12/2020

Category: General

Parking garage seen through a window 

2020 will go down in history as the year the Covid-19 pandemic brought the world to a standstill. The impact of the virus has been seen in all aspects of our lives — and when it comes to the auto industry, 2020 was a shocking change from the norm for car fans used to seeing new autos released each year and a steady predictability surrounding shipping and sales.

The pandemic disrupted major global events as well as local releases. Car production and shipping slowed down. But despite all this bad news, there are also some positives for the car world amidst the turbulence of 2020. Let’s take a closer look at the impact of Covid-19 on the auto industry.

The Local Impact

The most visible impact for Aussie gearheads has unquestionably been the slowdown in major auto events and releases. Not only have car fans seen iconic events like the 2020 Australian Formula 1 Grand Prix cancelled as a result of the pandemic, but the regular schedule of car releases that usually runs like clockwork has become unclear or subject to change.

Australia can be particularly affected by such changes for a number of reasons. First, we’re a comparatively small population spread across a huge continent, and the great majority of us live in capital cities. 

This means that the country beyond city borders doesn’t have the same presence that other nations do in rural areas — which is unquestionably one of the very best things about Australia, as anyone who has taken a road trip and seen miles of pristine beaches knows — but it also hurts us when it comes to the international market and auto manufacturers' desire to service us.

Like essentially every other industry, the auto world was caught off guard by the pandemic and its impact. As a result, it has taken time for manufacturers to implement new measures in their manufacturing plants, and it will be some time yet before they all get back to full capacity. 

While the economic downturn around the world means that many people have put off buying a new car, there is still demand from those who still have the means to purchase one — only there are fewer workers to build those cars. 

Unfortunately for the Great Southern Land, the result is often substantial delays to the release and availability of vehicles here, as manufacturers have to allocate time and resources to other markets that would have otherwise been utilised to build vehicles for the Australian market.

The Global Impact

When we consider the impact of the pandemic, we will likely think of the closure or reduced hours at our favourite cafe or restaurant. However, it's easy to overlook the fact that Covid-19 hasn't just affected customer-facing businesses, but all those in the supply chain as well. 


Although estimates vary wildly — just as the criteria for measuring the pandemic’s impact can vary — the pandemic has undoubtedly already cost the global economy many trillions of dollars. Some have estimated up to a colossal AU$37 trillion loss due to the pandemic, while even a more conservative estimate like AU$5.3 trillion made earlier in the year is still huge. 

It's therefore important to understand that issues like delays in shipping have not just been a result of dock workers being stood down or unable to work as a full team due to social distancing, but also a result of a potential delay in the supply of shipping crates, truck drivers to transport the cars to the docks, and so on. 

The Silver Lining

Although the pandemic has wreaked havoc on the auto industry and car fans around the world, there have been some positive side effects from the events of 2020. The growth in demand for electric cars seen in numerous markets across the world in one such example. Although the causes behind such growth are complex, people's inability to commute as usual via public transport is likely be a key factor. 

For any car fan that already owns an electric — or would one day like to and meantime supports the growth of clean and green auto offerings — then the new demand for electrics in the pandemic could be looked back upon as a key moment in the 2020s where the industry got a real ‘shot in the arm’, and converted a number of drivers from potential buyers to owners of electric vehicles. 

Nobody would wish for the challenges of 2020, but for any electric fans longing to see a greater appreciation and demand for this important class of vehicle, this year has delivered that in spades.

When Will It Get Better?

It’s no secret that many Aussies — and people in general — are especially looking forward to New Year’s Eve this year. 

2020 may have delivered a number of great memories and moments in the world of cars and beyond, but it’s also been the hardest year in living memory for most. For Aussies who love all things on 4 wheels who are anxious for a return to (some) normalcy, it’s fair to wonder about when things will get better. The good news is that a number of countries have already approved and begun administering a Covid-19 vaccine. 

It’s a complex process and will take time to fully roll out, but there is a light at the end of the tunnel. Before long, the factories will be humming again, a ton of cars will be shipping to Aus once more, and gearheads can look forward to a return in full force of events like the F1 Grand Prix. So there’s every reason to be revved up for a bigger and better 2021!

How have you experienced the impact of Covid-19 on the auto industry? Let us know in the comments below. 


Image: Pixabay