If you’re involved in the global car shipping market, you may be wondering what’s going on in the industry, and how the global COVID-19 pandemic has affected the industry. 2020 has been a tumultuous time for sure, so let’s take a look at how the current global car shipping market is moving, and some of the trends that may define the next several years.
Auto Sales Are Expected To Drop Sharply Year-Over-Year In 2020
One of the biggest impacts of COVID-19 has been purely economic. At the beginning of the pandemic, a record number of people filed for unemployment in the US, and many other major countries like Italy and China were also hit hard by COVID-19, resulting in an overall economic depression that has still not completely cleared up. New car sales in China, for example, plummeted by 71% in February.
Because of this, most auto industry analysts expect that auto sales both in America and worldwide will drop precipitously in 2020. Even though the outbreak is slowing in most countries and work is continuing to find a COVID-19 vaccine, the global sales of PVs (passenger vehicles) sold in 2020 are anticipated to be 71 million, down 20% compared to 2019.
This will have a major effect on the auto shipping market. Without high demand, it’s likely that many shipments worldwide will be canceled, and vehicles may sit in lots or storage units until consumer demand grows in 2021 and beyond.
Supply Chain Breakdowns Are A Major Cause Of The Drop In International Car Shipping
The biggest problem affecting international car shipping is that many automakers have had their supply chains disrupted in a major way. Even though a company may assemble a vehicle in the United States, for example, they may rely on parts and components sourced from China, Indonesia, Europe, and many other countries.
The “wave effect” of multiple COVID-19 lockdowns early in 2020, which resulted in export issues and factory closures in many countries, is still being felt today. Automakers are still struggling, in some cases, to acquire the parts and components they need to complete their vehicles on time.
In turn, this results in fewer shipments and deliveries by international car shipping companies. When cars can’t be completed and shipped on time, this leads to revenue loss and other major issues for car shippers.
Domestic Car Shipping Is Being Bolstered By Rising Moving Rates
According to a1autotransport.com, domestic car transport services have fallen somewhat compared to previous years, but overall, business is still good for domestic car shipping in the United States, at least compared to international auto shipping.
This is because most people shipping cars domestically are not subject to nearly as many regulations and travel restrictions compared to international car shipping – it’s a lot easier to ship a car from Maine to Ohio than it is to ship one from Japan to the United Kingdom.
In addition, COVID-19 coronavirus has caused a major boom in moving. Many people are choosing to relocate to be closer to family, to be further away from major centers of the outbreak, or to find new work opportunities. It’s estimated that 22% of people have moved or know someone who has moved due to the COVID-19 pandemic.
In addition, the rise in working from home has resulted in some people moving away from city centers into suburbs and “second cities” – people working fully remotely can enjoy lower costs of living by choosing to relocate in this way.
Historically low mortgage rates have also had an effect on moving during, as many people are taking this time to get a good rate on a home purchase and transition from renters to homeowners.
The Global Car Shipping Market Is Still On The Rise Overall
Despite the negative effect of COVID-19 coronavirus, the global car shipping market is forecasted to continue to grow at a healthy rate for the next decade. A report on the car carrier market found that the global car carrier market will grow at a CAGR (Combined Annual Growth Rate) of 2.7%, reaching a value of more than $1 billion USD by 2029.
So, whether you work in the international or domestic auto shipping business, or you’re just looking for an experienced transport company like A-1 Auto Transport to ship your vehicle domestically or abroad, keep this information in mind – while the global car shipping market may be struggling now, it’s sure to continue rising along with vehicle demand in 2021 and beyond.