The automotive industry continues to suffer the consequences of the coronavirus pandemic although it is managing to cushion the impact. Indeed, the world’s largest automakers have progressively recovered much of their activity in the third quarter of the year, thanks to an improvement in markets since the historic crash in April.
In the case of Europe, some countries are already beginning to overcome the pandemic with minimal drops in car sales and even growth. According to the latest PwC estimates, worldwide vehicle sales are expected to fall by 13.9% in 2020 as a whole, to 64.6 million units, while production will decline by 18.9% to 59 , 6 million cars. Only in the Old Continent, registrations will drop 28% this year and manufacturing up 26.9% compared to 2019 data.
In this context, manufacturers coincide in a recovery of their business between July and September, once the most complicated phase of the pandemic has been overcome with the closure of production plants and dealerships, as well as the different mobility restrictions imposed by the Governments to slow the spread of the virus.
The groups Volkswagen, Daimler, BMW, Ford, Renault, Fiat Chrysler Automobiles (FCA), PSA and General Motors recorded a combined turnover of 608,825 million euros until September, which translates into a fall of 18.4% compared to the same period of the previous year (see graph), that is, 137,892 million euros less.
Of the companies mentioned above, the Italian-American FCA is the only one that accumulates a loss until the ninth month of the year, with a red number of 1,537 million euros, compared to a profit of 1,122 million euros a year earlier.
Tesla, oblivious to the crisis
On the contrary, the electric car firm Tesla seems to live outside the crisis and is at its best. Through the ninth month of the course, it achieved net attributable earnings of $ 451 million (€ 379 million), compared to losses of $ 967 million (€ 812 million) for the same period in 2019, while its income they rose 21%, to 20,792 million dollars (17,460 million euros).
The firm led by Elon Musk accumulates five consecutive positive quarters thanks to the fact that its sales do nothing but grow. Thus, the company has exploded on the stock market and is the best valued automotive firm in the world with a capitalization of more than 500,000 million dollars (420,963 million euros), well above industry giants such as Toyota and the Volkswagen group , with 20.78 trillion yen (167,693 million euros) and 77,480 million euros, respectively. This has propelled Musk to become the second richest person in the world with a net worth of $ 127.9 billion (€ 107.62 billion), ahead of Microsoft co-founder Bill Gates, according to the Bloomberg Millionaire List.
For their part, the Japanese brands have so far presented the results corresponding to their first fiscal semester, which runs from April to September, and between Toyota, Nissan and Mitsubishi they add up to revenues of 122,597 million euros, which represents a decline of 30 % in the year-on-year comparison or 50,530 million euros less.
This improvement in the numbers comes after the 17 largest manufacturers in the world reduced their revenues by 41% in the second quarter, to 256.9 billion euros, according to data from the EY consultancy. The sector thus went from an operating profit of € 21.8 billion in the second quarter of 2019 to a loss of € 10.8 billion between April and June of this year.
After the recovery experienced by the sector in the third quarter, the companies have revised their forecasts for the full year, although they remain cautious and with numbers well below those registered in 2019. The Volkswagen group has confirmed that it expects to end 2020 with a positive operating result and with a turnover “significantly below” that of last year, while Daimler has predicted that it will register an ebit similar to that of 2019 after a normalization of the markets during the remainder of the year, despite volumes “Significantly lower” turnover and sales.
The French Renault is confident of its recovery capacity thanks to the evolution of its commercial policy in the third quarter, while the forecast of its compatriot PSA is to achieve an adjusted operating margin of the automotive division of 4.5% for the period covered between 2019 and 2021. BMW has also confirmed its forecasts for the full year and expects to achieve an operating return on sales of up to 3%.
On the other side of the Atlantic, Ford considers its adjusted operating result in the third quarter to be between break even and a negative figure of 500 million dollars (427 million euros), although it anticipates a positive figure for the whole of this 2020 .
Car registrations in Spain continue to decline and in November they will deepen their fall even further. According to industry sources, as of November 26, sales of passenger cars and SUVs were around 56,000 units, representing a fall of 27 % compared to the same period of the previous year.
The dealers’ employer, Faconauto, already warned at the beginning of the month of a 30% drop in registrations compared to November 2019 caused by the “selective” confinements that some autonomous communities have imposed to stop the second wave of coronavirus infections . In November last year, 93,158 cars were registered, so if the association’s forecast is fulfilled, the Spanish car market would close the eleventh month of the current year with a volume of around 65,650 units sold.
Registrations accumulate a drop of 36.8% between January and October compared to the same period of the previous year, with 669,662 cars delivered. This year they only grew in July, just the month after the Renove Plan was announced, endowed with 250 million euros. In this context, Faconauto claims that dealerships are considered an essential activity, both in the workshop and commercial areas.