Slump in car sales risks ‘garage death’

Sales of new cars are set to crash by up to a quarter this year in the wake of the Covid-19 crisis. This has accelerated a trend that could leave many garages struggling to survive. 

The Swiss car industry has been hit head-on by the pandemic, given that spring is traditionally the strongest season in car sales. 

Until May 11, salesrooms were shut and the only work that garages could carry out was repairs and servicing. 

The result of this, according to import association Auto-Schweiz, is that in April the number of new cars registered on the road was down two-thirds on the previous April and was lower than at any time since the oil crisis of the 1970s. 

Auto-Schweiz, citing the results of a survey, expects new car sales to fall by around 23% to 240,000 in 2020. The Swiss Association of Independent Car Dealers forecasts a similar situation and reckons up to 25% fewer new cars will be sold for the year as a whole. 

“But this figure assumes that business will pick up again in the second half of the year,” said Auto-Schweiz spokesman Christoph Wolnik. “If there were another wave of the pandemic, the figures would probably have to be revised down even further.” 

Garage threat 

Such a large decline in sales is likely to pose existential problems for some garage owners. Wolnik says the possibility of a “garage death” cannot be ruled out. However, this will only become apparent in the coming weeks, months or perhaps even in the course of the coming year. 

He says it could take ten years for the European car industry to recover. For that to happen, he says there has to be above all a general economic recovery and a positive development in the job market. 

“If people have the feeling they’re going to lose their jobs, they’re not going to buy a new car,” he said.