Pitstop Arabia Says About The Auto Business After the 2008 financial crisis, the auto business was in shambles. People could not afford to buy vehicles given their poor financial condition. A lot of car owners defaulted on their automobile payments. At the same time, tire and spare part manufacturers also posted losses. Pitstop Arabia Says It took a while before car sales started to recover, and things looked for the auto business. Pitstop Arabia Says However, the outbreak of COVID-19 has put the auto business on the back foot once again. Sales have tanked, while the whole auto industry is reeling from supply chain issues and dips in profits. Before we talk about the auto business, let us quickly clear a few things.
What is Pit Stop Arabia?
PSA is another name for convenience.
Suppose that you need new tires but cannot find the time to go to a tire shop in UAE. It is where PSA is most helpful. It is an online tire retailer in UAE that offers branded tires from nearly every tire manufacturer. All you need to do is go to PSA’s website, enter the required information, and that is it. You can have your tires delivered at your doorstep, or you can opt for installation at any one of PSA’s 200+ tire installers.
In addition to this, it offers:
What is Included in the Auto Business?
People generally think of the auto business as cars only. For them, the auto business is equivalent to car manufacturers. But that is not the case. The auto business consists of everything related to automobiles. For instance:
Auto Detailing Garages
Spare Part Manufacturers
Car Repair Shops
Car Battery Manufacturers & Sellers
The list can go on and on. Therefore, to equate the auto business with car manufacturers alone is incorrect. Now, let us get back to our main discussion.
Pit Stop Arabia’s Views Regarding the Auto Business As we live in the time of COVID-19, we need to understand its impact on the auto business.
One of the most notable impacts of the coronavirus on the auto business has been a decline in car sales. Due to lockdown measures worldwide, people had no use for cars. They were restricted to their homes. Also, unfortunately, many people lost their jobs. Hence, due to the lockdown measures and poor financial situation of many people, car sales plunged. It remains to be seen whether car sales will bounce back to pre-COVID-19 levels anytime soon. Another reason for low car sales is the disruption in the supply chains. Car manufacturers could not source the materials required to make cars.
When car sales are down, the tire sector suffers too. After all, if there are no new cars, what is the point of making new tires, right? Apart from this, due to the lockdown measures, tire industries were ordered shut. As tire companies were unable to make new tires, their profitability took a hit. Many were unable to sell existing stocks because people had no use for new tires given the lockdown measures. Only online tire retailers in UAE and worldwide fared well. People who did require tires bought them from retailers like PSA. It is why shops must have an online presence these days.
Just like the car and tire manufacturers, auto spare part manufacturers also took a hit. Many had their entire supply chains disrupted. Other than this, most had to shut down because of the coronavirus fears and government-ordered lockdown measures.
Less R&D Spending
Due to low profitability, auto businesses found it challenging to meet their funding requirements. Hence, many companies reduced budgets for non-operational functions like Research & Development. While it may seem harmless, that is not the case. Because of low R&D spending, we should not expect any revolutionary features in auto products.