How is Covid-19 still affecting Automotive? / 6 - Our Insights into Turbulent Trends due to Global Disruption Update 18 August 2020 - Expense ...
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How is Covid-19 still affecting Automotive? / 6 Our Insights into Turbulent Trends due to Global Disruption Update 18 August 2020
The corona virus has brought about an unprecedented crisis. Affecting
all industries, worldwide, in just a few months.
From the end of April last, we have updated you on the turbulent
trends in automotive due to covid-19. In the meantime, it seems that
the market is slowly settling down again.
In this final update, at least for now, we will summarize what have
been the consequences for the European vehicle market until now.
You will learn more about the last insights in
the expected developments of Residual Values.
Furthermore, an updated incentive overview
per country to stimulate car sales and
replacement. And last but not least, some new
opportunities that may appear on our horizon…
Managing the disruption, following China’s lockdown
Consequences for Global Production, update 18/8/2020
• For now, the most likely scenarios show:
− in 2020, European market will be between 20% and 30% lower
− it will take up to 2023 to reach 2019 volumes again
− production capacity will be aligned to cope with lower volumes
− lay-offs are occurring in all important production markets.
• These are expected to cause severe supply issues in several countries.
2
Consequences for the vehicle market in Europe
Consequences for Passenger Car Market, update 18/8/2020
• Passenger car sales in Europe reduced in June last by 35%
• First green shoots are appearing, e.g. in France
Source: ACEA
Consequences for Commercial Vehicle Market, update 18/8/2020
• LCV sales in Europe reduced in June last by 10%
• Sales are picking up again faster than personal vehicles,
e.g. in France, Poland
Source: ACEA
How the disruption affects businesses all over the world
Consequences for Fleet Owners, update 18/8/2020
• The bleak GDP forecast affects the Residual Value (RV) expectations for
European automotive markets. However, the expected drops vary per group
of countries:
3− France/Italy/Spain/Belgium/Portugal
Expected RV drop of around 3-4% in 2020,
still to remain 3-4% below pre-Covid levels in 2022
− DACH area
Expected RV drop of around 2,5% in 2020,
modest improvements in 2021 and 2022
− Nordics
Expected RV drop of around 2% in 2020,
rebound to 1% drop in 2021
− Eastern Europe
Expected RV drop of around 3-4% in 2020,
recovering to 1% below pre-Covid levels in 2022
− Netherlands
Expected RV drop of around 3% in 2020,
slow climb back to -1,7% in 2022
− UK (not in the graph below)
Expected RV drop of around 1% in 2020,
dropping further to around 3,5% below pre-Covid levels in 2022.
Source: Autovista Group
Our Expectations, based on the Insights until 18/8/2020
• Many governments are determined to support the particularly battered
automotive industry, that was already facing several expensive fights. Think
of new technologies, new competitors, the shift to zero-emission and
depressed margins. The pandemic and the associated lockdowns have
intensified this pressure.
• To stimulate new car sales or to stimulate the replacement of older cars with
cleaner models, some countries are to introduce several kinds of incentives.
For the most recent information, see here.
• But such a boost also causes risks, as buyers may see the incentives as a
signal that new cars are overpriced without them. And lower transaction
4prices of new cars reduce transaction prices of used cars. And thus further
lowering RV expectations.
• At the same time, governments run the risk of creating an oversupply of
used cars. This may be the case for PHEV versions as they are promoted in
the company car segment. But for the used-car buyer there is no similar
benefit to choose PHEV over fuel.
• However, we see also some opportunities!
Many dealers embrace new business models, such as online sales.
In addition, the reluctance to use public transport may lead to increased
demand for used cars and boost residual values in some countries.
Any questions? Feel free to mail or call
Do you need advice or support?
Do not hesitate to contact us.
We are always willing to work along with you, also during this crisis time.
• Henk Postmus, senior partner / fleet & mobility expert
• hpostmus@expensereduction.com
• +31 653 206 245
• https://www.linkedin.com/in/postmus/
About Henk Postmus
Since 2009 partner with Expense Reduction Analysts. As a specialist
in fleet & mobility, over the years, he has developed many
savings and efficiency solutions, in more than 150 projects, in 26
countries, for more than 35.000 vehicles. For each client, he
combines those solutions that best match the requirements of
the company. Furthermore, he supports more and more
companies that want to move in a greener and more sustainable
direction.
5Overview Incentives per country to stimulate Car Sales, updated 18/8/2020
Country Incentive For whom Validity Conditions Additional incentives
NL € 4.000 Consumers 2020 and 2021 New EV, >120 km range, list between € 12.000 and € 45.000 No road taxes and luxury taxes
NL € 2.000 Consumers 2020 and 2021 Used EV, >120 km range, list between € 12.000 and € 45.000 No road taxes and luxury taxes
FI None
UK Open
IRE € 5.000 Consumers & Business 2020 and further New EV
IRE € 2.500 Consumers & Business 2020 and further New PHEV
IRE € 5.000 Consumers & Business 2021 and further VRT Relief
IRE 100% accelerated WDA Business 2022 and further car value up to €24.000
FR € 7.000 Consumers 2020 New EV, < € 45.000
FR € 5.000 Business 2020 New EV, < € 45.000
FR € 2.000 Business 2020 New PHEV. < € 50.000, > 50 km Electric range
FR € 3.000 Trade-in 2020 Trade in EURO-5 or older, buy ICE car EURO-6, new or used
FR € 5.000 Trade-in 2020 Trade in EURO-5 or older, buy EV
BE None
DE € 9.000 Consumers & Business 2020 and 2021 New EV, FCEV, < € 40.000 0,25% BIK rate, no road taxes until end of 2030
DE € 7.500 Consumers & Business 2020 and 2021 New EV, FCEV, € 40.000 - 65.000 Up to List of € 60.000: 0,25% BIK rate, no road taxes until end of 2030
DE € 6.750 Consumers & Business 2020 and 2021 PHEV, < € 40.000 0,5% BIK rate
DE € 5.625 Consumers & Business 2020 and 2021 PHEV, € 40.000 - 65.000 0,5% BIK rate
DE 16% VAT Consumers & Business 2020 All new vehicles
DE € 6.000 Consumers & Business 2022-2025 New EV, FCEV, < € 40.000 0,25% BIK rate, no road taxes until end of 2030
DE € 5.000 Consumers & Business 2022-2025 New EV, FCEV, € 40.000 - 65.000 Up to List of € 60.000: 0,25% BIK rate, no road taxes until end of 2030
DE € 4.500 Consumers & Business 2022-2025 PHEV, < € 40.000 0,5% BIK rate
DE € 3.750 Consumers & Business 2022-2025 PHEV, € 40.000 - 65.000 0,5% BIK rate
SK € 8.000 Consumers & Business 2020 and further EV, M1 and N1 up to € 41.666 ex VAT No road taxes
SK € 5.000 Consumers & Business 2020 and further PHEV, M1 and N1 up to € 41.666 ex VAT 50% off road taxes
IT € 6.000 Private owners 2020 New EV, hybrid, LPG or Met car, CO2 10 years, applies to cars, LCV
New PHEV with < 40 km range, or HEV, or vehicles with LPG / CNG, AND list price < € 35.000
ES € 1.000 Private owners 2020 additional 1000€ by the dealer/make
AND returning and old used car > 10 years, applies to cars, LCV
New ICE cars with < 120gr CO2/km EURO6 AND list price < € 35.000 AND returning and old
ES € 800 Private owners 2020 additional 600€ by the dealer/make
used car > 10 years, applies to cars, LCV
Small & medium New BEV or PHEV with > 40 km range AND list price < € 35.000 AND returning and old used
ES € 3.200 2020 additional 1000€ by the dealer/make
Businesses car > 10 years, applies to cars, LCV
Small & medium New PHEV with < 40 km range, or HEV, or vehicles with LPG / CNG, AND list price < € 35.000
ES € 800 2020 additional 800€ by the dealer/make
Businesses AND returning and old used car > 10 years, applies to cars, LCV
Small & medium New ICE cars with < 120gr CO2/km EURO6 AND list price < € 35.000 AND returning and old
ES € 650 2020 additional 650€ by the dealer/make
Businesses used car > 10 years, applies to cars, LCV
New BEV or PHEV with > 40 km range AND list price < € 35.000 AND returning and old used
ES € 2.800 Large Businesses 2020 additional 1000€ by the dealer/make
car > 10 years, applies to cars, LCV
New PHEV with < 40 km range, or HEV, or vehicles with LPG / CNG, AND list price < € 35.000
ES € 700 Large Businesses 2020 additional 700€ by the dealer/make
AND returning and old used car > 10 years, applies to cars, LCV
New ICE cars with < 120gr CO2/km EURO6 AND list price < € 35.000 AND returning and old
ES € 550 Large Businesses 2020 additional 550€ by the dealer/make
used car > 10 years, applies to cars, LCV
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