The COVID-19 crisis will cause automotive research budgets to plunge 17 percent this year and 12 percent in 2021, according to a new study.
IHS Markit, in survey results released Wednesday, said development budgets also are expected to suffer, dropping 13 percent on average in 2020 and 8 percent in 2021.
“With cash flow drying up due to sales activity grinding to a halt in core markets and little prospect for an imminent ‘return to normal,’ automakers and suppliers are looking to shore up their finances by preserving cash and other noncritical expenses,” the research company said.
IHS Markit’s automotive supply chain and technology team surveyed 140 suppliers and automakers in North America, Europe and Asia.
Twenty-eight percent of respondents said they expect revenue will be impacted beyond the next 12 months.
Respondents also said they expect some R&D activities now outsourced to be brought in-house, especially at medium and large automakers and suppliers.
Other projects are…