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Automotive sales versus automotive recalls in Europe 2020

Considering the current economic climate we wanted to take a look at how car sales are comparing to recall volumes in the category to see if there was any correlation between the numbers.

New car markets have contracted across the world, the only anomaly is China, where the market has largely recovered. As of April 2020, new passenger vehicle registrations in Europe were 78% lower than the same period in 2019.

VDA, which is the German Association of the Automotive Industry produced a report in early May listing market fluctuations. It found that as with Europe, other automotive markets were also down significantly, namely the USA (-46.6%), Japan (-30.4%) and Brazil (-76.8%).

It speculated that the recovery of the Chinese market could be an indication as to how other markets will perform in Q3 when they move out of the lockdown phase of the global pandemic.

In comparison to recall numbers we found that from January until end March 2020 there were 133 automotive recall alerts in Europe, representing a decline on the 142 recalls in the first three months of last year.

With its dominant role in the sector, Germany was unsurprisingly the leading country of origin accounting for 37 per cent of all recalls. That was followed by France, Japan, the US and the UK.

The main risk type was ‘injuries’, which was cited in 110 of 133 recalls. The second most common risk type was ‘fire, which was listed in 12 recalls.

The automotive industry has been hit hard by COVID-19. As China battled the virus in the first few months of the year, there was an impact on the supply chain. And as we reached February and March, the industry in Europe had to deal with it first-hand, with production lines shuttered as lockdowns were implemented across the continent.

The lack of new products entering the market means recall figures will most likely drop in the coming months, but it’s important to remember that recalls don’t solely relate to new products. With people holding onto their vehicles for longer, there will be greater need for repairs and servicing and that could be a key growth area for manufacturers.

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