COVID-19 Impact on the Auto Industry

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COVID-19 Drawbacks

COVID-19 has had an immense impact all over the world. What is often looked past, is the huge affect it had on the automotive industry. Due to stay at home regulations, new safety measures and protocols, many supply and manufacturing complications occurred (Accenture, 2020). Stay at home regulations led to many employees being laid off and manufacturing plants shutting down (Augusta Free Press LLC, 2021). Delay in shipping also occurred due to new trade restrictions and border protocols (Accenture, 2020). This industry is heavily reliant on supply chains that are located all over the world, each place having their own regulations to follow (Das, 2020).  Because of these obstacles, many vehicle parts took a while to make and were in limited supply.

Customer demands changed drastically as well. With unemployment increasing, demand for cars decreased as many decided to save their money. Vehicle sales dropped 23.9% compared to 2019 (Business Insider, 2020). This decrease in profit forced companies to manage their risks and come up with more cost-efficient processes (Accenture, 2020). Not only this, but they had to come up with unconventional ways to connect with customers.


The Industry Adapts

Many companies have quickly learned to adapt to these trying times. Accessibility to online shopping and an increase in social media presence have helped them accommodate to their customers. Engaging with them online through social media allowed companies to create a transparent environment, even behind a computer screen. They have also implemented digital workplaces to keep workers at task, while also keeping them safe (Accenture, 2020).  In effort to increase sales, companies worked with banks to decrease interest rates (Das, 2020). While this did not return sales to normal, these efforts were still promising.


Lasting Positive Impacts

Very few things about the pandemic have left a favorable impact, however, these adaptations to the industry could be one of them. New and innovative research was pushed and are believed to have a lasting effect. Focus on the health and wellness of humans in vehicles increased and will continue to be of higher concern as a result of the pandemic (Business Insider, 2020). CO2 emissions decreased so much during the stay-at-home order that inspiration led to increased desire for electric cars. Tesla’s stock prices rose over Toyota’s and became “the most valuable automotive company in the world,” (Das, 2020). If this trend continues, it could have a stupendous effect on the environment.

It is believed that these changes will continue to be implemented and improved upon in the future. While some things will go back to normal, a lot of the technological advances will continue to create an impression on the automotive industry.



Accenture. (2020, April). Impact on the Automotive Industry: Navigating the Human and Business Impact of COVID-19.

Augusta Free Press LLC. (2021, March 25). How the COVID-19 pandemic is changing the automotive industry in the U.S.

Business Insider. (2020, July 24). COVID-19 Pandemic Implications for the Automotive Industry, 2020 – Best Practices and Recommendations for Business Survival. Business Insider.

Das, B. (2020, November 9). COVID-19 and the Automotive Industry: Changes, Challenges and the Future. Dartmouth Undergraduate Journal of Science.