How Automotive Industry in Canada Got Impacted by COVID 19?
The Novel Corona Virus or COVID 19, originated from Wuhan, China, in November 2019 has created havoc in the whole world. The deadly virus has affected more than 36 million people and claimed the lives of more than 1 million people across the world. The virus has spread to about more than 200 countries across the world. It resulted in the declaration of COVID 19 as a pandemic by the World Health Organization on the 13th of March 2020. With this pandemic, the whole world has come to a standstill. Different economies of the world have slowed down where some of them are even devastated. Due to COVID 19, the global automotive industry has been badly hit.
Major Reasons for Impacting the Industry
The automotive industry is undoubtedly one of the worst-hit sectors due to COVID 19. There are two major reasons behind the same that are as discussed below.
1. COVID started in China, and it was the first country to impose widespread lockdown. Due to the lockdown, the factories in China, manufacturing plants for the global automotive giants like Toyota, General Motors, and a number of others came to a complete halt. Even in Canada, the availability of auto parts near Pearson airport stopped, thereby disrupting the entire operation of the automotive industry
2. Secondly, due to the contraction of the entire economy of the world with pay cuts, job losses, and a number of others, the consumer dollars entering the market also came to a standstill that impacted the automotive industry to a great extent. The reasons mentioned above clearly indicate that the industry was hit both from the production side as well as the demand side. China began to open its factories in the month of March 2020. It is precisely the reason as to why the production pipeline very slowly stepped back to work. Slowly and steadily, cheap car parts in Etobicoke were available. With the factories starting to operate, the supply or the production side has started to ramp up once more. On the other hand, the demand was still very slow. This, in turn, resulted in very less inflow of consumer dollars to the automotive market of Canada.
Position of Automotive Sales In the United States of America, the trends in automotive sales play a significant role in telling where the economy is exactly heading to. It is because of the fact that the purchases in a huge amount of dollars, along with multi-year payment plans, give an indication to the changing consumer confidence in the growth of the economy. This, in turn, makes it quite clear that if people are losing their jobs or facing pay cuts, they would not be investing in new cars. Thus, automotive sales can undoubtedly be a very good indicator of the health of the national economy.
In Canada, automotive sales are not good at all and have been adversely impacted by COVID 19. The overall automotive sales data of Canada show a drastic fall by a whopping 74.6 percent in the month of April 2020. The case is the same in the automotive industry throughout the world. To make the situation even worse, the consumer slowdown has extended to automotive services and well as accessories along with other parts. The sales of auto parts near Pearson airport slowed down rapidly, almost coming to a halt. Even the cheap car parts in Etobicoke are not being purchased by the people. It seems that people have almost stopped using their cars as well.
Overall, it can be very clearly understood that COVID 19 has adversely affected the automotive industry not only in the nation of Canada but also in several other biggest economies of the world.
