Imported Car Companies "COVID-19, Consumer Sentiment More Concerning Than Supply Shortages"

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] As major automobile manufacturers in Europe decide to suspend operations one after another due to the novel coronavirus infection (COVID-19), domestic imported car companies are also closely monitoring the situation. For now, companies say there will be no issues with supply volume for 2 to 3 months, but they are raising their voices that the frozen domestic consumer sentiment is a bigger problem.

According to the imported car industry on the 29th, major European automobile companies are suspending factory operations for periods ranging from as short as two weeks to indefinitely. In addition, Hyundai Motor Group has also entered a shutdown of its factories in the Czech Republic and Slovakia, effectively halting all automobile production plants in Europe.

Because of this, most domestic import brands that distribute European volumes domestically are busy preparing countermeasures for the future impact. For now, they maintain that there is no problem with supply and demand.

An official from an imported car company said, "Most companies have already secured reserve volumes domestically, and there are also volumes shipped from Europe before the COVID-19 outbreak spread," adding, "There will be no problems for about 2 to 3 months going forward."

The problem arises if the situation prolongs. As the spread of COVID-19 in Europe is moving in an unpredictable direction, the 'two-week shutdown' is likely to be extended. An official from a German imported car company emphasized, "Currently, even the headquarters cannot specify a clear period for the factory shutdown," and added, "We are preparing our own countermeasures, but because the situation in Europe is so chaotic, this is not an easy task."

The bigger issue is the frozen consumer sentiment caused by COVID-19. There are forecasts that the sales rate, which has already declined noticeably, will become more difficult than the first half of last year when there were difficulties due to supply shortages.

According to the Korea Imported Automobile Association, the number of imported car sales in the first half of last year was 109,314 units, a 21.9% decrease compared to the same period the previous year. The market share of imported cars in the domestic market from January to May last year also fell by 2.4 percentage points from 16.7% at the end of the previous year to 14.3%.

An official from an imported car company explained, "Although it has not been precisely quantified yet, sales volume has definitely dropped sharply compared to February," and added, "There are concerns that if the shortage of popular model volumes due to factory shutdowns and unstable consumer sentiment overlap, a more difficult period than last year may come."

This content was produced with the assistance of AI translation services.