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While all auto takes a hit, niche cars are most at risk

Updated: Aug 28, 2020

It is clear that people miss mobility right now. Car manufacturers have tried to bring a little auto to those unable to hit the road, whether it be a simple car colouring book or Audi Australia trying to evoke the joy of driving from the comfort of people’s own homes. But the auto landscape seems likely to shift post-corona, both in the cars people are willing and able to purchase.

Auto companies and Australians alike are adjusting to huge losses that look sure to alter the purchase journey, remove dealerships and fast-track the removal of less popular models. Financial losses that predated the pandemic and forced the closure of companies like Holden could have real impact on the remaining players, and in particular smaller footholds like Peugeot and Citroen. Honda recently announced significant changes to its Australian operations. With a reduction in dealerships, (sources suggesting up to half of those in Australia), dealers, and a single national cost agreed for each model, Honda’s purchase journey will start looking more like that of Tesla. On top of coverage shrinking and the removal of the haggle Honda also announced a reduction in models to come. Peugeot announced the axe to 308 GTi in early April and the Honda Jazz seems shakey, potentially removing two key players from the small car category.

In a post-covid world it seems logical that the luxury car market won’t be the same. After a decade of continual growth Porsche saw more than a 20% drop in US sales over the January to March period. Brands like BMW and Mercedes that have been bringing down prices on new, more affordable models are likely to ramp up these efforts to suit a significantly reduced economy. While there has been public outcry for the luxury car tax to be scrapped, it doesn’t seem likely to leave any time soon, retaining an even higher barrier to entry than initial vehicle cost. And in a world where conspicuous consumption might be less acceptable for a while will people be as comfortable to drive around in such an obvious sign of wealth even if they can afford to?

Whilst we ride out (pun intended) this crisis may those of us with cars enjoy the little freedom that even stationary ones can provide. “Parked cars now double as quiet meeting spaces, meditation rooms, listening stations, nap pods, whatever extra spaces we need.”

Kitch Catterall and Zara Cooper

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