The Bad news Bear Opines on Effect of Corona Virus

Diary of a Plague Year




The Corona Virus is uncontrolled and there is no cure. Every facet of consumer spending is being affected. Here's my predictions as to the future of the car market in the next 12 months, new and used, if the virus spreads unchecked,

1. Production of all new cars will drop, with a sales drop. In China alone as the disease kills over 50,000, sales will drop over 90%.
2. Introduction of some new cars will be delayed, maybe even model years skipped, becuse automakers will not want a bad sales year for a model to be blamed on
the car and not the disappearance of buyers.
3. Ultimate limited edition cars will sell out in small editions-12 cars here, 25 there. But middle of the road luxury car sales will drop.

4. Certain brands that depend on prestige will die if they were already only breaking even.

5. Used cars at dealerships will have to be certified as clean of virus before they can go on a used car lot.
6. Private sales of used cars will be forbidden unless you the seller, can provide a " virus-free" certificate.
7. Bulletproof options will be sold on Land Rovers, Bentleys, Rolls Royces and Escalades because the diseased rabble might direct their anger at owners of luxury cars who seem to be disease free.
8. The value of collector cars will drop precipitiously as the excitement of auctions like the Barrett Jackson and Mecum et al will no longer be around to pump them up.
9. Ad agencies will close, no longer bring paid to develop ads. Newspapers will fold as there will be no dealer ads.
10. All car races will be cancelled, racetracks will close, the high performance race shops will close, all the sellers of hi po accessories will go bankrupt.

Is that enough bad news? Keep the pedal to the metal, gas prices are falling...
THE AUTHOR Anonymous for now, is the author of 18 car books

 

Wow, I thought I was pessimistic on covid19, but that is way out there.

It does actually seem like it can be contained, new cases in China have dropped to around 100 (0.1-0.3%) a day. The question is, how much of that is because of natural immunity, vs 'normal' precautions (like hand washing, staying home when sick) vs much more invasive measures like quarantines. Its hard to get a clear picture of exactly what is going on in Hubei, but the quarantines are at least partially still in effect. If the cases spike when the quarantines are finally lifted (maybe March 10th?) then it could be bad, but I think that's unlikely.

New car sales are already dropping, but its likely to be temporary. High end car sales are going to be low for a few weeks until the market calms down and the full effects are understood.

The Covid-19 likely only stays virulent for less than 24 hours on a surface, worst case a week. There will be no need for "virus free certificates".

Car races, particularly big international ones like F1 are likely to be canceled in the short term, long term this will be treated similarly to the flu though.

The industries that are in trouble though are the airlines. I think this is going to cause a long term depression in air travel as short term travel bans make people rethink just how much they fly in general. Lots of airlines aren't in great financial shape to begin with, and therefore there will certainly be a round of mergers and bankruptcies.