Blog - Covid-19 Analysis on Tire cord Market

2021-10-27

Due to the pandemic, stakeholders across the Tire Cord Market have seen a notable impact as all the production work, factories, and other activities were closed.

Covid-19 Analysis on Tire cord Market

The COVID-19 pandemic has wreaked devastation worldwide, with over 55 million infections reported so far – and counting. While the pandemic has been kept under control in China and Southeast Asian countries like Singapore, several countries in Europe have been affected by the second and even third waves, resulting in lockdowns. U.S. is among the world's worst-affected countries, the number of patients is on the rise till October 2021.

The impact of the economic slowdown, which is expected to last for a long time, has swept across the automobile industry, with supply chains and operations taking a huge hit. Due to the COVID-19 pandemic, global commercial vehicle production (GVW 4-8) is expected to drop 22% (more than 650,000 units) to 2.6 million units in 2020, compared to 2019. 

Individual regional forecasts are on the decline and supply chain implications are being seen as a result of the virus's effects, which have resulted in the closure of production and supplier sites all over the world. 

The automotive industry in China has witnessed several ups and downs. Many car dealers were forced to close their business in the early months of the pandemic, resulting in a 60% drop in customer visits compared to the previous year. The closure of Chinese auto OEM factories had a rippling effect that was eventually felt throughout the global supply chain.

Thus the significant drop in production volume and demand of the automotive industry has directly impacted the tire cord market, especially during the 2019-2020 period. However, the conditions are getting back to normal. The automotive industry market revival is expected in the forecast period, coupled with an improvement in tire cords during the forecast period.

Furthermore, The majority of mainland China's commercial vehicle manufacturing has now resumed production. Shutdowns across China cost truck makers more than 80,000 units in January-February; output in March appears to have recovered a fraction of this volume, despite Hubei province workers returning in the second week of the month, two weeks later than workers in other regions. The relative strength of the March statistics over February shows that many facilities are likely to be operating at near-full capacity once more.

Thus, Despite the devastating blows to the automobile sectors in Europe and North America, the Chinese market has recovered and exceeded the previous year. Before the virus outbreak, automobile sales had been on the decline for some time. Still, due to specific government measures, such as introducing new car purchase discounts, the market began to recover by the beginning of the summer. 

The reviving automotive industry is expected to further create immense opportunities for the tire cord market in the forecast period and is estimated to show unprecedented market growth during the forecast period.

However, the pandemic conditions are still uncertain and if further lockdown or shutdown of industries happens, the industry's market might see a drop even further. Although growing vaccination percentage across the globe, especially big population countries like India, is more likely to create positive opportunities for the market in the forecast period.

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