A ranking of top vehicle manufacturing companies worldwide compiled by data and analytics company GlobalData shows the impact of the COVID-19 coronavirus crisis will be strongly adverse across the industry this year, with all major companies impacted.
The GlobalData ranking – which takes into account factors impacting company performance such as positioning for disruptive megatrends, as well as the impact of the COVID-19 coronavirus crisis – shows Tesla and Toyota leading the 32-strong field of automotive companies.
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The COVID-19 theme has been newly introduced to the GlobalData ‘thematic’ scorecards and it stands out as the number one short-term theme for the automotive sector. However, themes such as electric vehicles are just as important for medium- to long-term prospects – which partly drives Tesla’s position at the top of the pile.
Attention this year will be firmly focused on the impacts on the sector coming from the COVID-19 crisis that is forcing temporary manufacturing plant shutdowns of uncertain duration.
“The COVID-19 crisis is hitting automotive companies hard on both the supply- and demand-side this year,” says GlobalData analyst Calum MacRae. “Supply chains are being disrupted and market demand has suddenly plummeted across the major regions of the world during March. It looks like the market demand crisis and loss of volume for companies will extend into the second quarter before some stabilisation and recovery thereafter.”
However, MacRae also notes that the sector was under pressure before the coronavirus crisis hit. “This crisis is rather unhelpfully layered on top of already rapidly growing pressures on company bottom lines arising from the need for increased investment in costly advanced technologies such as electrification and automated drive systems. In Europe, manufacturers were also facing challenging new CO2 averages that European companies said impeded their global competitiveness.
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By GlobalData“The industry is now clearly facing even tougher conditions and headwinds this year.”
“The industry is now clearly facing even tougher conditions and headwinds this year.”
But he also notes that top-of-the-ranking Tesla is fortunate to have only just started production in China. “If you didn’t have much to lose you can’t lose too much,” he wryly observes.
“And second-placed Toyota benefits from a pretty diverse geographical footprint.”
In summary, the industry faces a very difficult year, MacRae says. “Some industrial consolidation and restructuring is inevitable. The long-term disruptors pointed to sector transformation anyway. The COVID-19 crisis will likely accelerate that process and add to volatility in the sector and company performance in 2020.”
