Highest Degrowth Countries across the world in new car sales
The calendar Year 2020 has been a difficult year for the Automobile Industry across the World. While some countries registered growth, despite the odds, some were able to minimize the effect to the extent possible, there were some which registered a free fall and declined very dangerously.
We share with you the list of 10 countries which declined very greatly. We will also try to identify plausible reasons for the same.
These unfortunate countries are :
Algeria
The Algerian Auto Industry plummeted by 81% in 2020, registering its lowest figures in the last 40 years.
There were many possible reasons for this :
The ban on all vehicle imports by the Govt was the most direct reason. The Govt wanted to build the local industry but the Pandemic striking put a blow to this strategy while also blocking imports.
The economic situation is very bleak: pandemic woes, tumbling oil revenues, the slump in oil demand, OPEC production cuts.
Lockdown and/or restriction in movements of people affecting the economic cycle and rotation of money affected supply/demand across the sectors.
Tourism and Trade suffered due to disruptions in the international movement of goods and people.
There were also widespread political protests due to parliament approving changes to the constitution in Mid-September.
The import ban had seen the Auto Industry volumes dropping from 4.3L light vehicles units in 2013 to 1.02l units in 2017. There was a slight improvement to 1.23L units in 2019 but the Industry collapsed in 2020 to just 0.21L units.
The huge drop in sales volume has affected the financial viability of the local manufacturing units.
Syria :
The Automobile sales in 2020 declined to 2941 from a level of around 87000 in 2011.
The decline has been attributed to the restive situation in the republic.
The nation has been at war continuously with opponents ranging from the protestors of the present Bashar al Assad regime to the ISIS, rebels backed by the US n Turkey, Turkey, and even Israel. Some semblance of normalcy is being established with the end of the dreaded ISIS and the present regime overcoming the US n Turkey-backed rebels. The nation however continues to be in the War Zone and thousands of refugees continue to flee the country.
All this has affected the economy causing high inflation, corruption, and closure of manufacturing and trade.
There does not seem to be an early solution to come out of this tragic situation.
Lebanon:
The Auto industry in Lebanon had already dropped to 33000 units in 2019: the lowest in a decade. It further dropped to 13000 in 2020 affected by the Pandemic and the internal fissures in the Lebanese economy.
The decline in the Automobile industry has been primarily attributed to the liquidity squeeze in withdrawing foreign currency. Due to this, the import of cars is not considered a priority, and this wrecked havoc. Many dealerships have had to close shop due to the shortages, and this has further affected the supply and demand equation.
Venezuela:
The economy of Venezuela is primarily based on Petroleum exports.
The collapse of the World Oil prices in 2019 and continuing decline in 2020, the pandemic woes reducing the demand for Oil across the Globe as also the political unrest in the country have led to huge inflationary pressures and fiscal deficit for the country.
Full-year sales in 2020 dropped to 1675 nos.
Curacao:
It is a Dutch Caribbean island, known for its beaches and its expansive coral reefs rich with marine life. The total population of the Island is 1.58L.
Totally 1432 units were sold in 2020.
The country depends on tourism as its major source of Tourism. The Island nation, blessed with scenic seafronts and coral reefs attracts a large number of tourists. The industry dropped dangerously in 2020.
The main reason for the same was the pandemic.
Georgia:
Georgia is a country at the intersection of Europe and Asia. It has a human population of 4 million people.
The country is bordered by Russia, Turkey, Iran, and Armenia.
The economy of Georgia has been traditionally revolved around the Black Sea Tourism, cultivation of citrus fruits, tea and grapes as also the mining of Manganese and Copper. There is also a large industrial sector around the manufacture of wine, metals, machinery, chemicals, and textiles.
Restive disturbances in its two provinces of South Ossetia and Abkhazia since the 1990s, when Georgia became independent, have affected the economy.
The Auto industry in Georgia is dominated by tractors and other Agri Machinery based implements.
The disturbance in the world economy due to a fall in oil consumption, travel and tourism, and industrial output has affected Georgia particularly.
The economy has seen a free fall and high inflation coupled with high unemployment has seen the purchasing power of its people drop drastically.
The immediate future of Tourism, the backbone of the Georgian economy, looks bleak; and this only exacerbates the overall scenario for the Georgian Auto Industry.
Nepal:
The landlocked mountainous region of Nepal depends on Tourism and its nearest giant neighbors of India and China for its economy.
The Auto Industry clogs around 20,000 units per year in Nepal.
Much of these Automobile units are distributed across the country thru the manufacturing bases in India and China.
The topography of Nepal, largely mountainous, has meant that the population is largely concentrated around Kathmandu and a few pockets around the Terai region.
The economy suffered due to the severe effect of the pandemic in its immediate giant neighbors of India and China.
There was a disruption in the supply chain as also utilities including fuel.
The recent political differences between India and Nepal, over the territorial claims too may have added to the economic collaboration getting affected.
Tourism has taken a big hit, and this contributes very very substantially to the Nepalese economy. With the pandemic raging in India; and travel restrictions to India, Nepal will suffer more than other countries.
Togo:
It is a country in Western Africa, with a human population of around 8 million. It borders Ghana and Benin.
The economy is largely dependant on Agriculture. The major crops cultivated are rice, cassava, and millets. There are also huge deposits of phosphates.
The country depends on its electricity supplies from Nigeria and Ghana.
The full-year Auto Sales in 2020 were 360 numbers.
The steep drop in sales has been attributed to the poor performance of the services sector. The pandemic too has played its part, with imports being affected. Togo depends on imports from Algeria and other African neighbors.
The country is one of the poorest in the World, and the economic indicators are not strong.
Panama:
It is a Central American country with a population of 4 million people.
It is most famous for the Panama Canal.
The Auto Industry dropped to around 20,000 units in 2020.
The major revenue for the country is through the toll for trade that happens through the Panama Canal. However, tourism, banking, and commerce too are now growing and contributing substantially to the economy.
The disruption of the supply chain due to the pandemic, especially in the US and Brazil, affected the movement of goods on the Panama Canal, affecting the economy of Panama. Its effect was seen across the sectors, and even automobile too.
Dominican Republic:
The Dominican Republic is a nation in the Caribbean isles and shares the island of Hispaniola with Haiti to the west.
It is best known for its beaches, resorts, golf courses.
It has a human population of 10 million.
The country has the largest economy in the Caribbean and Central American region and the eighth-largest economy in Latin America. It has been the fastest-growing economy in the Western Hemisphere over the last 25 years. The growth has been driven by construction, tourism, manufacturing, and mining. It also has low inflation.
The Auto industry in 2020 was 13318 numbers.
The factors that have affected the industry are :
With tourism, one of the major sources of revenue, affected by the pandemic and its restrictions, a huge hit has been taken by the economy.
Haiti, the second most trading partner, has imposed a huge import fee of USD 800 on Dominican exports. This has caused a huge impediment.
Retail and Transport sector declined due to lesser arrival of the tourists, due to Pandemic.
The country has long been considered a tax haven and safe getaway for the rich and famous tax evaders across the globe. This has now attracted the attention of the law-enforcing authorities in these countries.