Consumer Demand In Critical Condition As Covid-19 Forces VW To Halt Production
Nearly three months of social distancing and shutdowns across the globe have inevitably led to dire consequences both personal and economic. The car industry is reliant on rampant consumerism to sustain a ceaseless business model. Sudden and mass unemployment has shocked the heart of every financial system. And as a result, the entire car industry is reeling, writhing around, wounded, and dusting off the debris, still standing as carefully planned business models now yield an uncertain future. Yet as the enforced lockdown eases, the very future that breeds renewed hope is being held to ransom by a belligerent microscopic torpedo.
The first wave of the coronavirus appears to be subsiding as the world begins to awaken from hibernation it didn’t expect. But what is yet to come? Will a second, more deadly wave take its revenge and cause yet more economic strife? No one can say for sure. Volkswagen is feeling the effects of a virus that has caused mass surrender on a scale never before seen.
The long term effects of Covid-19 is not restricted to a physical smash and grab raid, it is a wrecking ball. And it leaves behind a long term economic legacy. The 2020 Pandemic has caused sudden economic shock, three months and the world economy is upside down, inside out, in a delirious haze pondering on how we all got here and how we can get out.
As we approach the heat of summer Covid-19 has caused a nuclear-winter as the world marches out of lockdown. Yet there is no debris, everything looks normal, nothing needs to be rebuilt, it is simply empty, and the sun will shine. For now. For Volkswagen and similar automotive titans, the fall is hard. Demand may be down, but a rebound will happen.
However, the feeling is that it’s too early, consumer demand is in critical condition, on life-support. VW has gradually restarted production, however weak demand is forcing VW to reduce output at its production facility in Wolfsburg to four days per week. VW expects the situation to “normalise as soon as possible”. Normal now means a temporary production halt of the SEAT Tarraco, Touran, and Tiguan.
However, Covid-19 is anything but normal. For those who are unemployed, the short term future is to secure a stable short term future. It may well be the days of normalization will not return fully until January 2021, and who knows, will there be a second Covid-19 wave? Let’s hope not.