The Link Between Car Sales and the Economic Crisis in the European Union at the Time of the Covid-19 Pandemic

Laszlo and Torok

International Journal of Finance, Insurance and Risk Management, 2021, vol. 11, issue 1, 68-77

Abstract: Purpose: Car production is one of the most important bases of the European Union's economy. The present study examines the negative effects of the Covid-19 pandemic on the new car market in the European Union in the first half of 2020. Design/Approach/Methodology: First, the economic and emotional elements of buying new cars are presented. The methodological part presents the data on new cars sold and the decrease in GDP during the period under review. It then examines, using a correlation calculation, how strong the relationship is between GDP as a dependent variable and new car sales as an independent variable. Findings: The analysis confirms the hypothesis that the European Union economy is highly dependent on emissions from the automotive industry. Using data collected for research, the study also confirms that the outbreak caused panic in the new car market. The study sees this as evidenced by the fact that the median value calculated from the decrease in new car sales per member state is more than three times higher than the value of GDP decline in the member states. Practical Implications: The experience of previous crises demonstrates that these crises have the potential to fundamentally change consumer behavior and that these changes persist in consumers. This is likely to be the case after the Covid-19 pandemic. People working in the automotive sector have to be prepared for these changes. Originality/Value: Due to the high economic weight of the European Union's car industry, it is impossible to reach the pre-crisis level of EU GDP without rehabilitating the sector

Keywords: Covid-19; European Union; GDP; car sales (search for similar items in EconPapers)
JEL-codes: D01 E23 E32 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journalfirm.com/journal/250/download (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ers:ijfirm:v:11:y:2021:i:1:p:68-77

Access Statistics for this article

More articles in International Journal of Finance, Insurance and Risk Management from International Journal of Finance, Insurance and Risk Management
Bibliographic data for series maintained by Marios Agiomavritis ().