Yes, the COVID-19 outbreak is a human tragedy unfolding in real tame on a global scale.
It’s also triggered an economic mess. Among other things, global auto sales have collapsed and car companies have shifted to producing respirators, ventilators, masks and face shields. It’s wartime.
We saw this coming in February. Scotia Economics notes that global sales plunged more than 20% year-on-year, following a 10% drop in January. Blame China, where during the heart of its COVID-19 lockdown, car sales evaporated — down 82% “as the economy came to a halt.”
Sales in other parts of Asia slipped as much as 50 per cent during this time. Something similar is coming to Canada, the United States and Europe. Already, car dealers in Canada are fielding calls from consumers asking to defer payments. By the thousands.
Still, Canada and the U.S. entered the pandemic in decent shape, auto-wise. “US and Canadian auto sales still sat in positive territory for February at 8.4% y/y and 2.1% y/y respectively,” notes Scotia Economics. Many hoped that 2020 would be a good year for auto sales.
Now, with economic activity “brought to a near-standstill,” all businesses are relying on a new type of capitalism: huge interest rate cuts, massive government spending and various marketplace interventions for support. Central banks and governments worldwide have signalled a willingness to do anything necessary to keep economies alive and ready to race from the gates once the COVID-19 crisis passes.
“At present, these measures are more about stemming losses than stimulating activity which can only resume when consumers can move freely with best-guesses tentatively putting a three-month clock on this,” notes Scotia Economics.
Well, that was uplifting.
I don’t know about you, but I need a diversion. It’s all a bit too much. So I’m back to the incredibly bizarre Tiger King on Netflix.