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COVID-19 and the auto industry

One industry that’s been significantly affected across the board is the automotive industry. From the overall industry to gap insurance and electric vehicles, we take a look at what’s going on.
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April 1, 2020

 2020 has fast become a year of uncertainty due to the outbreak of COVID-19, commonly known as the Corona Virus.

Thought to have started in China, it has quickly spread across various continents and countries, with many people infected and many dying as a cause of the virus. Here in the UK, advice has been issued by the Government and the NHS to help individuals keep safe and prevent the spread.

Alongside the advice to go on lockdown, industries have therefore been downing tools across the globe. One industry that’s been significantly affected across the board is the automotive industry. From the overall industry to gap insurance and electric vehicles, below, we take a look at what’s going on.

 The auto industry

 Due to people being told to stay indoors and work from home, the automotive industry, which can’t do this, has been forced to put the brakes on production, regardless of who they are.

 Over the past few weeks, Tesla has been forced to shut down its Fremont Factory, while three of the biggest automakers in the USA have had to re-evaluate what they can do. They account for 44% of all auto sales in the USA. It’s thought that the USA will see a sales drop of around 9% following the outbreak.

 Meanwhile, here in the UK, Aston Martin, BMW, Honda and Toyota have all halted car production for the foreseeable future, while a swathe of other car manufacturers have shut down or scaled back production in Europe, including: 

  • Ferrari
  • Fiat Chrysler
  • Ford
  • Renault
  • Volkswagen
  • Nissan

 Insurance

 With many types of car insurance available, individuals across the land are probably wondering how the virus outbreak will affect them.

 Luckily for motorists, they should be covered. This is because all car insurance companies that are signed up to the Association of British Insurers (ABI) have to support members during a crisis. Therefore, those who need to claim and those who are key workers will be supported.

It’s important to note that even if you aren’t driving due to government guidelines, your car insurance should still be a priority and should always be insured. Meanwhile, those looking to renew during isolation should arrange cover based on their usual driving. If you’re unsure about anything, contact your insurer.

Electric vehicles

 While the budget announced plans to improve the infrastructure for electric vehicles, these plans currently remain in place. However, how it’s being worked on is yet to be seen due to other commitments the Government have to make. And, with the halt in car production, it would appear that the electric car industry is in the same way as the regular car industry.

 With uncertainty falling on everyone at this time, the car industry is no different, and only the next few months will reveal just how affected it will be.

 

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Chris Wright

Chris Wright

Chris Wright has been covering the automotive industry nationally and internationally for 30 years. Following spells with consumer titles he became News Editor of Automotive Management (AM), Editor of Automotive International, International Editor for Detroit-based Automotive News, and Editor of Dealer Update. He has also co-authored several FT Management Reports and contributes regularly to Justauto.com

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