The novel Coronavirus pandemic that started in the last month of 2019 and progressed into 2020, took the world by surprise. It was an epidemic that kept everybody, including governments, on their toes. The effect of the pandemic is noticeable across every sector of the economy and the lifestyles of people. Many countries had to shut down their economies and shut down their cities as part of measures to curtail the dreaded virus. The effect of the lockdown prevented social and economic activities from going on, especially those activities termed non-essential, and the automobile industry alongside several others were affected. Interestingly, China, where the outbreak of the virus started, is a key player in the automobile industry, making it difficult for the industry to thrive during such a period. There were records of disruption of supply chains of automotive parts, making it difficult for the automobile industry to manufacture new cars. If you take out time to read various car companies’ reviews at that period, you might likely come across the impact coronavirus had on the industry.
Now, let’s look at the various ways coronavirus affected the automobile industry.
Coronavirus Led to Delays at Chipmakers
A survey conducted by a semiconductor analyst on 46 firms in the automotive IC supply chain revealed that almost two-thirds of respondents were expecting significant delays in technology deployment for upcoming launches in the industry. As a result of this delay, a chip with a 7-nanometer node size is likely to be delivered in a 14-nanometer node size, lowering expectations and ambitions for particular AV platforms. This will reduce the generation of revenue in the automobile industry, as people will take a break to reconsider the economic realities of the virus. Going through US-reviews, might help reveal some basic information on the impact of coronavirus on automobile firms, from the customer point of view.
Auto sales Decline
During the coronavirus pandemic, a lot of companies including those in the automobile industry were forced to stop business operations. For instance, in the United States, automakers like Ford and General Motors closed plants and instead focused on delivering respiratory ventilators at the request of the government. It was estimated by the IHS Markit that as a result of the pandemic, 2020 worldwide auto sales are expected to decline by at least 22%, leaving about 70 million vehicles sold instead of roughly 90 million. As a result of the coronavirus pandemic, there is a likelihood of a market speed up that could compel chipmakers to focus on the auto-sector more narrowly.
Development of the Robo-taxis
As a way to curb the spread of the virus, experts on public health are beginning to consider the possibility of driverless robort-taxis in the future, as it won’t require a human for its operations. An auto analyst, Michael Ramsey, thinks the longer-term trend will be the AV market becoming more diversified and less driven by the scale of the auto industry as a whole, at least as far as delivering SAE Levels 4 and 5. Instead, he believes that advanced chips for AVs will be much more focused on ADAS soon.