COVID 19 Outbreak

A microscopic virus has become a common enemy today. Due to Covid 19, people across the world are at home. Many countries have closed borders, and in some places, you can go out only to buy essentials and in case of any medical need. Restricted transportation, shut industries, rising unemployment, and plunging stock markets are all signs of the forthcoming recession. The automobile industry is among the worst affected. Various factors affecting the bike industry are discussed below:

1.   Falling Sales:

With showrooms shut, many large companies have experienced no sales in recent days. Moreover, many people who had bought vehicles a little before the curfew measures are not able to complete the registration process. It may further keep people away from buying when the lockdown eases down.

Many people are taking pay cuts, and few are on the verge of losing jobs too. Almost every country fears a recession soon. As a result, people would not be interested in buying bikes on EMIs. Further, with a looming health crisis, people would certainly look forward to enhancing their wellness factors, and thus are more likely to spend money on it. So, bike sales could be low even after the lockdown ends.

2.   Manufacturing comes to a standstill:

Industries have also stopped functioning during the lockdown period because of social distancing. And, in most of the countries, authorities at the helm are not ready to ease down completely. In places with less COVID positive cases, governments allowed the industries to operate with a reduced number of workers. But, auto workshops require the physical presence of staff while the processes of assembling, quality control, final testing, etc. take place. Moreover, the auto industry is labor-intensive and less staff implies lesser efficiency. Sometimes, people may not be able to reach factory premises due to travel restrictions. It is also possible that people have moved to their native towns and are unable to return.

In the case of startups, like those in the EV (electric vehicle) category, the recovery will take a much more extended period. Dropping demand would reduce cash inflow, and therefore there are chances of companies running out of cash reserves.

3.   No more leisure trips:

In the technology era, people either use public transport or cars for daily commutes. When it comes to luxury trips, we often rent out luxury sports bikes. Bikes like Ducati, Harley-Davidson, Kawasaki motorcycles, BMW-Motorrad, etc. are always on the bucket lists. However, in the current scenario, such tours are not only banned but are unsafe too. People may not be willing to meet strangers on the road, eat, and sleep at a random place. So, it will take a considerable time for sales in the luxury bike segment to revive. Similarly, it will be a challenging time for bike rental services too. Many people might look into hygiene and sanitization aspects in every walk of life now on.

4.   Supply Chain Disruptions:

When you have manufacturing units in your country, it does not imply that companies are self-sufficient. Many of them import motorcycle accessories and assemble them locally. The supply of these became hard when the virus started spreading in China. Several global auto-part producers like Robert Bosch, Valeo, etc., have their manufacturing unit in China. Thus, the bike industry is facing supply chain issues since January 2020. With the infection spreading all across, the problem is taking a colossal figure in the auto industry too. And, closed borders and trade restrictions have caused further delays in the procurement of auto parts.

5.   Long term work from home options:

As the virus spreads rapidly to every corner of the world, the percentage of the population staying indoors keeps increasing. However, we should be thankful for technological advances that allow people to work remotely. Many companies are already in the process of making remote work permanent for a large percentage of their employees. Even employees have found it productive and time-saving too. Thus a need for bikes and other commute vehicles would drop significantly.

Road to recovery:

The bike companies are facing supply chain issues, and on the other side, due to the lockdown, many equipment manufacturers are facing liquidity issues. Manufacturing requires adequate capital, and in situations where demand is soaring, not many are willing to invest. Government aids such as tax deferrals, short-term financing would help the equipment manufacturers, dealers, and showrooms facing an acute cash crunch. On a positive note, the industry experts believe that after the end of the virus onslaught, many people might prefer private vehicles over public transport.

This article is brought to you by Stoneheadbikes – India’s leading bikes rentals and tours company based out in Delhi having branches in Bengaluru, Pune, Jaipur, Dehradun, Rishikesh, Chennai, Mumbai, Kathmandu & Bhutan. If you wish to rent a bike or looking for more information about motorbike tours, drop us a line or simply pick up your phone and call us up and we will have everything arranged for you in a timely fashion.