Impact of Covid-19 Outbreak on Automotive E-Commerce Market
The automotive industry witnessed a sharp drop in vehicle sales in the first quarter of 2020 due to shutdowns across most of the nations combined with an oil price war. Major automotive OEMs practiced various strategies to mitigate the pandemic’s impact on their business by taking inventory from their dealerships and assessing to open market and resume services. A sudden and severe impact Of the COVID-19 pandemic has been observed in the global automotive industry with associated symptoms such as the closure of assembly plants in the US, a slowdown in the export of Chinese parts, and large-scale manufacturing interruptions across Europe. This pandemic has created intense competition and pressure on an industry already coping with a downshift in global demand, which is likely to increase mergers & acquisitions.
Of all the technology-driven disruptions of the 21st century, only a few can rival the impact of e-commerce on the automotive industry, wherein online sales have powered the growth of companies manufacturing key automotive components, parts, and accessories. MRFR predicts automotive e-commerce to perform well during the coronavirus crisis, fortunately leading to a recession-resistant market. However, few major e-commerce companies have focused their promotions and advertisements on essential and health-related items.
The automotive supply chain in China, South Korea, Japan, and Europe have been heavily impacted by the outbreak. Therefore, tier-2 and tier-3 suppliers are expected to be most affected by this disruption. Also, with only top-tier suppliers visible, the new entrants are expected to experience slow growth. The competitive forefront of supply chain operations is more likely to shift toward more proactive and comprehensive modelling.
In the US and Canada, automotive e-commerce (OEM parts, and accessories, among other components) witnessed a jump of over 60% in sales in April 2020 as compared to the previous month with around 10 million user sessions and over 200 thousand online transactions for components, parts, and accessories.