COVID-19 Impact on Connected Cars Market in Automotive Industry | DBMR

Posted by Prakash on May 25th, 2021

COVID-19 Impact on Connected Cars Market in Automotive Industry 


The COVID-19 a pandemic disease created severe outbreak in all the countries starting from China to almost in every country. It has impacted the human life, world economy, sports sector, industrial sector and other owing to which lockdown is initiated for prevention and to lower the spread. To control the disease spread lockdown is so far the better solution observed in the many countries but it has adverse effect on the economy. Standard safety measure adopted most government bodies is implementation of lockdowns & curfews all over the state or region except urgency services and daily needs sector. Implementation of lockdowns & curfews resulted in temporary closure in all industries and its activities until lifting of lockdowns is announced by the government bodies. COVID-19 Pandemic is not only regarding health or medical crisis moreover economic conditions are also facing consequences due to the pandemic situations. This lockdown scenes resulted in high level impact on all sectors, most of the businesses suffered debts and losses; however few businesses made huge profit in these pandemic situations. The pandemic situation created major impact on the customer’s financial incomes as companies are facing financial wrath, employee lay-offs, pay cuts and other problems are emerged in the global connected car market. The automotive industry witnesses strong hit in the first quarter of the 2020 as the all manufacturing facilities, showrooms and other corporate offices, storage points and logistics & supply chain has been shut down. Connected cars are facing similar sales draught as that of other non-connected vehicles. Collaterally connected cars technology and industry is facing serious decline in sales and operation. The pandemic situation created major impact of the customer’s financial incomes as people are now looking to complete needs rather than going after wants and desires such as buying a connected car. Car has almost become a vital part of the human life and automotive industry has witnessed strong decline in sale or zero sale at the end of the first quarter. Market leading players such as Toyota, Volkswagen and others are facing decline in revenue growth comparing to the previous year.

For instance, In May 2020, according to Hindustan Times sales of passenger vehicles in India have fallen down to 18% which worst fall in several decades. However, the growth for connected cars market is paused but not denied.

Impact on Demand of Connected Cars

Connected cars are considered as future technology and replacing non-connected vehicles, connected cars are being rapidly adopted since its invention. Over the last 5 years connected cars have seen exemplary growth in adoption rate due to its precisely advanced features at not much higher cost than normal vehicle in particular segment, features such as auto-vehicle diagnostic, safety & security, eco driving and other such unmatched advance features.

 COVID-19 Impact on Connected Cars Market in Automotive Industry

to COVID-19 pandemics, the demand for connected cars has witnessed a serious hit in first and partially second quarter of the year 2020 during COVID-19 pandemic; which has resulted in sales decline which is worst in history since its inventions. However, with easing of lockdowns and resumption of operations in various industries and manufacturing plant; demand for connected cars is slowly rising as manufacturing plants have started manufacturing the products on small scale with adhering to social distancing norms stated by government bodies. Apart from manufacturing, sales of connected cars have resumed as automotive showrooms have reopened after easing in lockdowns and curfews.

Following table shows the statistics for number of connected cars sold in India by Kia motors. Kia motors offer two connected car models in India Seltos and Carnival. Below table can be taken as reference for performance of other auto manufacturers as pandemic COVID – 19 have impacted on whole automotive sector.

From the table it can be observed that during lockdown situation in India, Kia Motors sales zero connected cars in the month of April. In the month of May when lockdowns started easing up gradually countrywide, sales again picked up for connected cars and demand is increasing steeply. Same situation is applicable worldwide as time period for lockdowns and curfews varied due to non-uniform spread of corona virus.

COVID-19 Impact on Connected Cars Market in Automotive Industry

Though the demand for connected cars is increasing after easing of lockdowns and others have been restricted during this pandemic; supply chain is heavily hit and still remains cause of concern as it is affecting the production cycle and distribution cycle. Many of the international and national import/export facilities are restricted across boundaries which are acting as barrier to supply chain and its management. With restricted supply chain; manufacturing of connected cars is being affected due to less availability of raw material and on the other hand distribution of manufactured connected cars is a challenging task. However; with legal permissions and safety measures supply chain is getting back on track which should aid market growth for connected cars in the future.

Steps Taken by Manufacturers during COVID-19 Situations

In these pandemic situations, most of manufacturing sites remained shut due to government regulations; however with limited operating staff manufacturing sites have attained permissions to restart manufacturing. Sighting products are not that much in demand; manufacturers are investing more time in research and development which can be implemented in latest products. Also; manufacturers are not taking risk of manufacturing over the demand and are cautious of further market scenario as situation in many parts of the world is unclear and vulnerable.


From the overview, impact on demand & supply chain and steps taken by manufacturers, it is evident that initially connected cars got slumped in demand and supply due to macro environmental factors; contrastingly in just matter of a quarter of the year, in mid-2020 connected cars market seeing surging growth owing to easing of pandemic restrictions imposed by governments. Even after COVID-19 pandemic ends, the growth for connected cars industry will not slump as benefits such as secured driving, remote control, auto fault diagnosis and others are having more advanced technological features, following social distancing remains best solution to avoid spread of such virus diseases. Apart from supply chain, every procedure is back on track. However, in several months situation is expected to ease for full-fledged supply chain flow.

Even after pandemic gets over the demand for connected cars is expected to increase. “In a post COVID-19 world, we do expect continued adherence to social distancing norms. Apart from demand-side variability, the auto sector will continue to face challenges related to non-availability of labor, concerns on health and safety management on the shop-floor”, said Vinay Raghunath who is automotive sector leader.

Adding to it he also explained the need of not be dependent on manual operations and supply chain management, “A digital shop-floor with specific interventions on planning and execution will become the new normal. Every player in the auto sector must invest ahead of the curve to achieve greater resilience and develop immunity against the future market uncertainties.”

According to Keith Blodorn, Director of Program Management at ProSoft Technology tells that manufacturers are heavily investing in the manufacturing material handling robots in order to maintain workers and operations safety.

Above statements from industry experts, it can inferred that market for connected cars is predicted to be optimistic as demand is expected to experience surging rise at greater pace when logistics, manpower and supply chain executes at full-fledged pace. Connected cars offer more than one advantages over non connected cars; it also helps in lowering spread of corona virus infections by following to social distancing norms. Even after the pandemic situation gets over automation of industries will continue to increase which acts as major driver for the market. In coming half decade connected cars market looks fairly positive in terms of growth and can be considered as a good opportunity.

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