Hopes of a "V-shaped" recovery in the auto industry by the end of this year or early next year are fading due to a second wave of outbreaks in many of the world's largest economies, media reports said. GlobalData, a leading data analytics and consultancy, believes the car industry will not fully recover until 2023, several years later than previously agreed.

        Optimists might point out that, at the very least, this does mean that business is returning to normal and that car sales are indeed picking up. At the same time, some radical environmentalists are trying to point to the sharp decline in sales as a turning point in the rapid phase-out of internal combustion engines, calling for the elimination of them with zero-emission electric vehicles.

        The auto industry has been hit by unprecedented shocks in the first half of 2020, with industry insiders predicting that global sales in 2021 could return to levels close to those of 2019. According to a Fitch Ratings report released in late summer, global new-car sales fell 25-30 per cent in the first half of this year, with a 15 per cent drop in China, a 24 per cent drop in the US and a 40 per cent drop in Europe.

        Global light vehicle sales, including cars, SUVs and pickups, totaled about 90m in 2019 and are expected to fall to 75m this year before recovering to 84m in 2021, according to AUTOMOTIVE forecasters LMCAutomotive at the time.

        The consensus was that the global car industry would return to 90m units by late 2021 or early 2022. But global car sales will not return to pre-epidemic levels until 2023, according to a report released by GlobalData on Thursday.

        It is expected to return to pre-outbreak levels by 2023, but there are still risks on the road to recovery

        Global light vehicle sales are expected to grow 14.6 per cent to just over 85 million units in 2021, GlobalData said in its report. The market is expected to return to at least 2019 levels by 2023, but risks remain on the road to a recovery in demand for the sector over the next few years.

       "That number is expected to be 85 million in 2021, compared with the previous peak light vehicle sales of 94 million in 2017 and 2018," said Karen McRae, an analyst at the agency. "Just a few years ago, the industry was expecting global light vehicle sales to top 100 million, and we are still a long way from that number."

       Mr McRae stresses that this year's market recovery should be defined as a market response to a particular event, rather than being part of a more traditional economic cycle in normal times, but that the knock-on effect of this particular event is a change in the economic backdrop.

       "Starting next year, a lot will depend on the path of the world's major economies," McRae added. At that point, the recession is likely to become more widespread, with demand affected by rising unemployment and some permanent trauma from the epidemic. This could force the government to extend special measures and support for the industry, such as continuing to encourage the adoption of electric cars in Europe."

       Europe's current recovery has been driven largely by sales of electric cars, which have been boosted by huge government subsidies and economic stimulus packages, and the industry fears that the European market will lose momentum later this year amid fears that the spread of the epidemic has not been contained but has been temporarily delayed.

       Nor does GlobalData give accurate forecasts for Europe, the US and China, the world's biggest markets.

        Brexit and the US election have also created uncertainty about the industry's recovery

        Carmakers face the prospect of making massive investments to cope with fundamental industry shifts, including electric cars, the rapid development of self-driving cars, and different forms of car ownership and new mobility services. Events such as Britain's exit from the European Union and the upcoming US presidential election have also created uncertainty about the recovery.

       At the same time, industry analysts worry that there is a time limit for direct government economic support, and if the money runs out, the economy could fall again, hurting efforts to revive auto sales.