The new car sales market contracted by 29 per cent in the first three quarters of 2020, with passenger vehicle registrations down from circa 9.9 million in 2019, to 7.05 million in 2020, according to figures from the European Automobile Manufacturers Association. This decline warranted further analysis to help us understand the impact this downtown had on recall data tables.
From January until November, there have been 248 alerts submitted to the European Commission’s Rapid Alert System (Safety Gate) for passenger cars. The total submissions for motor vehicles for 2019 in its entirety was 475, and it is unlikely that recall volumes will reach this number by the end of 2020.
Much of the alerts submitted in 2020 were for vehicles that were manufactured in previous years. The European Automobile Manufacturers Association produced an interactive map of the effect of the COVID-19 crisis on the production of motor vehicles for the 27 EU member states.
Its findings showed that production loss borne from factory shutdowns was around 2.5 million vehicles by June 2020. This accumulated to 567 production days lost across Europe. Automotive manufacturing accounts for millions of jobs and billions of Euros in investment. Last year, Europe exported 5.6 million motor vehicles worth €136 Billion, of which Germany represents 60 per cent.
With the bulk of this year’s recall alerts relating to vehicles that were manufactured before 2020, the volume of recalls in Q4 and in 2021 will shrink further because manufacturing ground to a halt during COVID-19.
Provided there are no major emissions scandals waiting in the wings, recalls will be down next year, however, the need for good customer handling will have to be front of mind for OEMs as they move into the new year.
Just as manufacturing has been affected by COVID-19, so too has customer service operations. Anyone who has made a call to an institution such as a bank in the last six months will be acutely aware of waiting times to speak to someone.
Indeed, consulting giant Deloitte said in a recent paper on customer service that during these unprecedented times, businesses and consumers have had to adapt to new ways of working which have impacted customer service teams. Interestingly though, unlike banks and travel companies, motor insurance companies have witnessed a decline in calls because fewer people are driving at present. And we expect that to be the case for car dealers which could be causing more harm than having too many calls.