Top exec expects sales to return to normal by no later than July.
With news that various manufacturers will resume production soon, and knowing that China has already seen a boom in sales, it's only a matter of time before the dark cloud lifts and things return to normal. It could be sooner than expected, too, as a European Kia executive is predicting sales volumes will normalize by no later than July this year. That's according to an interview with Automotive News Europe.
However, it won't be without a "catastrophic" drop in sales volumes before then, with April setting record drop in sales for the Korean automaker, despite the Kia Telluride picking up a World Car of the Year award.
In Europe, registrations for the month were down by as much as 80%, although Emilio Herrera, Kia Europe's COO, believes things will only improve from here. He estimates that the decline in year-on-year sales in May will be around 50%, and by June, just 25% lower than normal. By July the market should make a full recovery. He also believes these figures could be improved further with the help of world governments, claiming that if incentive programs are offered by governments, we could see things return to normal even sooner.
"We need to put in place scrappage plans like in 2009. Electrified cars are much more expensive than combustion-engined vehicles," Herrera said, in a separate interview with Reuters. That same report mentioned an unemployment insurance plan. Meant for European customers, the plan protects clients from having to make monthly payments on a new vehicle if they lose their job.
"If we want to stimulate demand now, we need to help the low-income people who are first going to lose their job," he stated.
Herrera isn't the only automotive industry figurehead looking for a sort of "cash for clunkers" type of program. Executives at Ford Motor Company have said the same thing. Ironically, the original program set forth in the late 2000's thinned the market of cheap used vehicles available to low income earners.
Yet this is of little concern to automakers that don't make money on used car sales, as these packages could be applied to hybrid vehicles like the Kia Niro, and can make them more affordable without forcing buyers to transition to EVs if they're not yet ready to do so.
Kia is just one of the brands to have resumed international production, with its Slovakian plant responsible for the production of the Kia Sportage resuming duties just last month. Of course, America is still in the middle of the coronavirus pandemic, so delays continue, but the predictions of a steady recovery are good news for the industry as a whole, and the trend in the US should follow that of Europe once things settle.