AlixPartners Europe boss Stefano Aversa thinks that the EU should delay the implementation of the region's tougher CO2 emissions regulations until next year.

Stefano Aversa, who leads consultancy AlixPartners in Europe, says the auto industry “needs to forget 2020 as soon as possible and move forward.” His company predicts the coronavirus pandemic will cause European vehicle sales to drop by 32 percent this year, which will hammer profits. Therefore, he predicts many most automakers and suppliers will use 2020 to “clean up their balance sheets.” Aversa discussed this and more with Automotive News Europe Associate Publisher and Editor Luca Ciferri and Correspondent Andrea Malan.

The Global Automotive Outlook 2020 that AlixPartners published on June 8 envisaged two possible scenarios for European vehicle sales this year in light of the pandemic. The baseline view was that sales would be down 32 percent compared with 2019. The more drastic view was that there would be a “prolonged recession” with deliveries falling 36 percent. Which is the most likely?

Our baseline forecast of a 32 percent decline is the most likely. We are more pessimistic than most observers [industry association ACEA, for example, predicts a 25 percent decrease], but barring a major new wave of infections, I feel the prolonged recession hypothesis is too negative.

How about the other major markets?

China staged a typical V-shaped rebound, with sales already back to a pre-pandemic level. North America is in the middle. We forecast a 21 percent decline in 2020 followed by a quick recovery in 2021. The November elections in the U.S. will help sustain the rebound, as they usually do. The fiscal stimulus measures already put in place [in the U.S and Europe] are unprecedented, they are much larger and have come much faster than those taken in 2008. Europe suffered from a stricter, longer lockdown, therefore the recovery so far has been inconsistent.

Could the recent rise in coronavirus cases in the U.S. endanger the recovery there, especially if authorities impose a new round of lockdowns?

So far, authorities are locking down bars and restaurants more than car dealerships and production sites. In addition, inventories of SUVs are still very low.

This article was originally published in Automotive News Europe.