Coronavirus is best-known as a global healthcare crisis, but it’s also hard to overlook its far-reaching socio-economic impact.
One industry that has been particularly impacted is the automotive sector, with the UK having seen car sales decline by a staggering 44.4% during March alone.
This is lower than any monthly drop reported during the financial crash of 2008, while the global industry is expected to lose more $100 billion before the Covid-19 crisis is over.
We’ll explore this further below, while asking how Ford (the UK’s favourite car manufacturer) has fared in recent times?
Appraising the UK Market and Ford
From the UK perspective, social distancing and the introduction of lockdown measures has already seen production lines and dealerships close, while economists predict that the national car market could shrink by up to 25% by the end of the year.
In sales terms, this means that just 1.73 million vehicles are likely to be sold this year nationwide, while it has yet to be seen how the fallout will impact on next year’s figures.
Despite being the nation’s most iconic and popular automotive brand, Ford Motor has not been immune to such a downturn.
In fact, it recently reported that it expects to post a pre-tax loss of around $600 million for the first quarter of 2020, while the Covid-19 outbreak has also resulted in a 21% decline in vehicle sales in relation to figures from 2019.
Currently, only Ford’s joint ventures in China (where the virus is receding) are currently producing vehicles, although the brand is looking to phase in the restart of additional manufacturing plants in Europe during Q2.
Ford also has sufficient cash holdings to survive relatively comfortably until the end of Q3 this year, even without any (or even incremental) vehicle production during this time.
Given that manufacturing is continuing on a reduced scale and the fact that Ford is planning further financing actions in the near-term, this popular brand is well-placed to survive the worst of the coronavirus outbreak.
Why is Ford Such a Popular Brand?
As of April 9th, Ford reported that it had an estimated $30 billion in cash on its balance sheet, including a total of $15.4 billion borrowed last month against two existing credit lines.
This is a testament to the popularity and marketability of the brand, which has long since been one of the UK’s most loved car manufacturers.
At the heart of this is its diverse range of reliable cars, with the iconic Ford Focus at the head of this queue. Interestingly, data analysis showed the trusted Focus to be the world’s biggest-selling car in 2012 and 2013, with its unique combination of reliability, economical performance and compact design central to the vehicle’s universal popularity.
This vehicle embodies Ford’s appeal better than any other, while it isn’t the only manufacturer’s model that boasts global popularity. Take the Ford Ka+, for example, which can be sourced from new for as little as £10,000 and offers exceptional performance across the board.
With all of these points in mind, we’d wager that Ford will survive the fallout from Covid-19 better than most, and ultimately cement its place at the forefront of the UK market.