IDEAS home Printed from https://ideas.repec.org/a/ers/ijfirm/v11y2021i1p68-77.html
   My bibliography  Save this article

The Link Between Car Sales and the Economic Crisis in the European Union at the Time of the Covid-19 Pandemic

Author

Listed:
  • Laszlo
  • Torok

Abstract

Purpose: Car production is one of the most important bases of the European Union's economy. The present study examines the negative effects of the Covid-19 pandemic on the new car market in the European Union in the first half of 2020. Design/Approach/Methodology: First, the economic and emotional elements of buying new cars are presented. The methodological part presents the data on new cars sold and the decrease in GDP during the period under review. It then examines, using a correlation calculation, how strong the relationship is between GDP as a dependent variable and new car sales as an independent variable. Findings: The analysis confirms the hypothesis that the European Union economy is highly dependent on emissions from the automotive industry. Using data collected for research, the study also confirms that the outbreak caused panic in the new car market. The study sees this as evidenced by the fact that the median value calculated from the decrease in new car sales per member state is more than three times higher than the value of GDP decline in the member states. Practical Implications: The experience of previous crises demonstrates that these crises have the potential to fundamentally change consumer behavior and that these changes persist in consumers. This is likely to be the case after the Covid-19 pandemic. People working in the automotive sector have to be prepared for these changes. Originality/Value: Due to the high economic weight of the European Union's car industry, it is impossible to reach the pre-crisis level of EU GDP without rehabilitating the sector

Suggested Citation

  • Laszlo & Torok, 2021. "The Link Between Car Sales and the Economic Crisis in the European Union at the Time of the Covid-19 Pandemic," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 11(1), pages 68-77.
    • Handle: RePEc:ers:ijfirm:v:11:y:2021:i:1:p:68-77
    as

    Download full text from publisher

    File URL: https://journalfirm.com/journal/250/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rabin, Matthew, 2002. "A perspective on psychology and economics," European Economic Review, Elsevier, vol. 46(4-5), pages 657-685, May.
    2. Hung, Kam & Petrick, James F., 2012. "Testing the effects of congruity, travel constraints, and self-efficacy on travel intentions: An alternative decision-making model," Tourism Management, Elsevier, vol. 33(4), pages 855-867.
    3. Carsten Ochsen & Heinz Welsch, 2011. "The social costs of unemployment: accounting for unemployment duration," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 3999-4005.
    4. Ory, David T. & Mokhtarian, Patricia L., 2005. "When is getting there half the fun? Modeling the liking for travel," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(2-3), pages 97-123.
    5. Sturgeon, Timothy J. & Van Biesebroeck, Johannes, 2009. "Crisis and protection in the automotive industry : a global value chain perspective," Policy Research Working Paper Series 5060, The World Bank.
    6. Bennedsen, Morten & Larsen, Birthe & Schmutte, Ian & Scur, Daniela, 2020. "Preserving job matches during the COVID-19 pandemic: firm-level evidence on the role of government aid," GLO Discussion Paper Series 588, Global Labor Organization (GLO).
    7. Dmitry Ivanov & Alexandre Dolgui, 2020. "Viability of intertwined supply networks: extending the supply chain resilience angles towards survivability. A position paper motivated by COVID-19 outbreak," International Journal of Production Research, Taylor & Francis Journals, vol. 58(10), pages 2904-2915, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laszlo Torok, 2020. "The Link Between Car Sales and the Economic Crisis in the European Union at the Time of the Covid-19 Epidemic," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 1033-1042.
    2. Madalina Balau, 2019. "Symbolic and Affective Motives, Constraints and Self-Effi cacy among Romanian Car Buyers," Journal of Marketing and Consumer Behaviour in Emerging Markets, University of Warsaw, Faculty of Management, vol. 1(9), pages 14-29.
    3. Fang, Da & Guo, Yan, 2022. "Flow of goods to the shock of COVID-19 and toll-free highway policy: Evidence from logistics data in China," Research in Transportation Economics, Elsevier, vol. 93(C).
    4. Lovejoy, Kristin, 2012. "Mobility Fulfillment Among Low-car Households: Implications for Reducing Auto Dependence in the United States," Institute of Transportation Studies, Working Paper Series qt4v44b5qn, Institute of Transportation Studies, UC Davis.
    5. Huneeus, Federico & Kaboski, Joseph & Larrain, Mauricio & Schmukler, Sergio L. & Vera, Mario, 2022. "The Distribution of Crisis Credit: Effects on Firm Indebtedness and Aggregate Risk," CEPR Discussion Papers 17061, C.E.P.R. Discussion Papers.
    6. Priom Mahmud & Sanjoy Kumar Paul & Abdullahil Azeem & Priyabrata Chowdhury, 2021. "Evaluating Supply Chain Collaboration Barriers in Small- and Medium-Sized Enterprises," Sustainability, MDPI, vol. 13(13), pages 1-28, July.
    7. Saurabh Pratap & Sunil Kumar Jauhar & Yash Daultani & Sanjoy Kumar Paul, 2023. "Benchmarking sustainable E‐commerce enterprises based on evolving customer expectations amidst COVID‐19 pandemic," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 736-752, January.
    8. Zuoxian Gan & Tao Feng & Min Yang, 2018. "Exploring the Effects of Car Ownership and Commuting on Subjective Well-Being: A Nationwide Questionnaire Study," Sustainability, MDPI, vol. 11(1), pages 1-20, December.
    9. Inés Macho-Stadler & David Pérez-Castrillo, 2018. "Moral hazard: Base models and two extensions," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume I, chapter 16, pages 453-485, Edward Elgar Publishing.
    10. Paul, Ananna & Shukla, Nagesh & Trianni, Andrea, 2023. "Modelling supply chain sustainability challenges in the food processing sector amid the COVID-19 outbreak," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    11. Dong, Han & Zhang, Jun & Cirillo, Cinzia, 2019. "Exploring, understanding, and modeling the reciprocal relation between leisure and subjective well-being," Transportation Research Part A: Policy and Practice, Elsevier, vol. 130(C), pages 813-824.
    12. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    13. Basu R, Jothi & Abdulrahman, Muhammad D. & Yuvaraj, M., 2023. "Improving agility and resilience of automotive spares supply chain: The additive manufacturing enabled truck model," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).
    14. Papanagnou, Christos & Seiler, Andreas & Spanaki, Konstantina & Papadopoulos, Thanos & Bourlakis, Michael, 2022. "Data-driven digital transformation for emergency situations: The case of the UK retail sector," International Journal of Production Economics, Elsevier, vol. 250(C).
    15. Tiago Afonso & Anabela C. Alves & Paula Carneiro, 2021. "Lean Thinking, Logistic and Ergonomics: Synergetic Triad to Prepare Shop Floor Work Systems to Face Pandemic Situations," International Journal of Global Business and Competitiveness, Springer, vol. 16(1), pages 62-76, December.
    16. Naimoli, Antonio, 2022. "Modelling the persistence of Covid-19 positivity rate in Italy," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    17. Guerrero-Amezaga, Maria Elena & Humphries, John Eric & Neilson, Christopher A. & Shimberg, Naomi & Ulyssea, Gabriel, 2022. "Small firms and the pandemic: Evidence from Latin America," Journal of Development Economics, Elsevier, vol. 155(C).
    18. Erika Sandow & Olle Westerlund & Urban Lindgren, 2014. "Is Your Commute Killing You? On the Mortality Risks of Long-Distance Commuting," Environment and Planning A, , vol. 46(6), pages 1496-1516, June.
    19. Dmitry Ivanov, 2022. "Viable supply chain model: integrating agility, resilience and sustainability perspectives—lessons from and thinking beyond the COVID-19 pandemic," Annals of Operations Research, Springer, vol. 319(1), pages 1411-1431, December.
    20. Ghanei, Shima & Contreras, Ivan & Cordeau, Jean-François, 2023. "A two-stage stochastic collaborative intertwined supply network design problem under multiple disruptions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).

    More about this item

    Keywords

    Covid-19; European Union; GDP; car sales;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:ijfirm:v:11:y:2021:i:1:p:68-77. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://journalfirm.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.