European car sales doldrums will last longer than in China – VW boss

Published: 19 May 2020

 VW sales/marketing chief forecast
 Euro car sales slow to bounce back
 ‘A longer recovery’ than in China

A senior manager at Volkswagen predicts that the recovery from the coronavirus crisis will take longer in Europe than in China, where buyers are already returning to showrooms in droves. 

Jürgen Stackmann, VW’s sales and marketing board member, told CAR that car buyer behaviour could change forever, as the public accepts new ways to purchase and more online retail experiences. 

‘We think coronavirus will not only have a lasting effect for a few months – it will actually change some of the ways in which we do business in future,’ he said. ‘It will have a lasting effect. We saw it first in China.’

How the Chinese car market recovered from Coronavirus

China, where the coronavirus pandemic started, bore the brunt of the virus several months ahead of Europe and the VW executive recalled how the market there seized in February, but recovered to around 75% in March and April closed on par with a normal month.

‘It was a very deep, very sharp decline but we expect now to be at or above our normal level, amazingly enough,’ revealed Stackmann. ‘Is China going to be the template for the rest of the world? I don’t think so, I’m afraid. China has this huge demand and 60% of customers there are genuine first-time buyers in the market. 

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‘It’s still unbelievable for us as Europeans, but it does mean that in China we see this underlying power of demand, pulling this industry through very fast stuff because people want to buy cars and they want to get mobilised… in bad times people go back to trusted brands. We are, I think, trusted. We have led for many, many, many years in China, so that was almost to be expected. So, China is quite vibrant and I would say that our expectation is a V-shaped recovery.’

How quickly will the European car market bounce back from Coronavirus?

‘The rest of the world is likely to take longer,’ warned Stackmann. Volkswagen has reopened its factories in Europe, but they’re running at less than half capacity: normally VW manufactures around 55,000 cars a week here and is currently producing some 20,000 weekly. 

‘It will be a longer journey to climb back out of this,’ Stackmann admitted. ‘There is reason to hope that this industry can come back almost to the level it had had before, but with a longer recovery curve. 

‘We believe in the UK that the underlying demand remains strong. People who intended to buy a car before the crisis are still keen to do so. There is a drive towards online selling, so people can sell bikes and cars without actually going through showrooms. We will start to do this.’

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A unique – and very sudden – crisis

Figures for April 2020 confirmed the UK car market stuttered to an almost complete halt, with sales down 97%. ‘Basically no sales, and we’ve never had that before,’ noted Stackmann. ‘Nobody can remember ever having a big market with no sales for a month. And we had the same in France and Italy and Spain. 

‘It shows you the unusual character of this crisis. I think we had crises before, but there was always an underlying industrial strength; demand just slowed down, and we could adjust our whole system. In this case it was like going from a sprint, because we were really ramping up our stocks for the spring sale, with campaigns around the world, to a full stop. This is why it’s now so important to restart the engine.’

By Ben Miller

The editor of CAR magazine, story-teller, average wheel count of three