A New World Order Will Emerge After Covid-19

Europe could see greater consolidation among auto brands, while electric vehicles may take a backseat

- Murali Gopalan

When the Lehman crisis broke out a little over a decade ago and caused the world to go into a tailspin, it had a massive fallout on the auto industry.

One of the biggest casualties was Detroit, which went belly-up and big brands like General Motors and Chrysler found themselves in a bottomless abyss. This, however, turned out to be an opportunity for a company like Fiat to throw its hat into the ring and snap up Chrysler, a move that has paid dividends since then, thanks largely to the resurgence of the Jeep brand.

In the aftermath of the Lehman crisis, GM also reset its priorities, exiting from a slew of markets like Thailand, Russia, Australia, South Africa, and India. Today, GM has prioritised China, the US, and Latin America as its key focus growth areas in a bid to stay lean and mean.

It was also during this global slowdown that Peugeot shelved its India project, planned in Gujarat, since it was virtually skating on thin ice. There were tie-ups forged with GM globally but it was finally Dongfeng Motor of China which played the knight in shining armour and bailed out the French automaker.

Fast forward now to the present global catastrophe, where a minuscule assassin going by the name of COVID-19 has wreaked the kind of havoc which makes the 2008-09 global slowdown look insignificant in comparison. The European automotive industry is virtually haemorrhaging with big brands gasping for survival.

Trail of death

As COVID-19 continues to spread its trail of death, it is only natural to expect the world to never be the same again when the virus eventually runs out of steam. Big automotive markets will be in ruins and the process of collecting and putting together the pieces all over again will be a tough and arduous task.