The Automotive sector is an essential factor of economy and it is impacted by Covid-19 in the entire World. This year is one of the most critical economic growth of a country. It contributes in a country GDP, provides employment to people engaged in engineering, designing, manufacturing, logistics, assembling process, sell & services.
It is estimated that there will be an overall revenue impact of at least $1.5 -2.0 bn per month across the industry
Even it provides employment to other industries which are Direct or Indirect connected to Auto Industry like distributors of goods and services, raw materials, child parts, electronic components, machinery, computers, advertisements etc. Without Automotive sector, it is very difficult to support of any manufacturing industries in any country.
Since the beginning of this year 2020, we are getting the news of global crises, pandemic of Novel Corona virus (Covid-19), which is originated at the end of December 2019 in Wuhan a city of the Country China. The corona-virus is spreading rapidly across the world and having a huge impact on all aspects of society, including Automobile sector.
Hence, already industrialist and suppliers struggled very hard in January and February to Raise Automobile sector but after WHO’s declaration that Covid-19 is an unprecedented global disruption then all industries and their manufacture shutdown the plats worldwide and we witnessed of suddenly fallen of sales of every major industry globally in this Q1 period of 2020.
Major challenges which are facing by the Automotive sector
1.Supply of vehicles and components
During lock down within and other countries there is a restriction between trading by both land and sea, also with neighbor countries which increased the shortage of required parts and components also to its manufactures who supplies child parts.
And shipments are being delayed which is already in transportation before pandemic and now return to their arrival points after border restrictions. After lock down and reduction in some restriction the interstate trade resume and provide reliefs to manufactures with their suppliers for trading and also with their customer’s industries.
2.Manufacturing of Vehicles parts & components
After the shutdown in China and prohibition between nations for imports the auto manufactures and auto components sector are majorly affected. And if China’s shutdown extends then it expected to result about 8-10% fall in Indian manufacturing in 2020.
China is major supplier of batteries in India and supply to three-quarters manufactures of India. Manufactures are suffering with delaying in projects, delaying in schedules and Customer services.
After pandemic manufacturing resume but with less schedule as same as before outbreak and due less schedule may be manufactures and suppliers may be hit with fall in sales and profit.
3.Sales and marketing
During lockdown mostly people drop their Plan for purchasing new car and save their funds to relief their family during pandemic. And also, after Lockdown mostly of them financially not in position to buy a new vehicle and other Goods and services.
According to Society of India Automobile Manufacturers (SIAM), passenger vehicle and two-wheeler vehicle sales, both, declined by 18 per cent in March-April 2020 as compared to the same period last year.
This Q1 & Q2 period is seems bad as compared to the last year and may be improved in after June or July. Many company’s put their feet in online E-commerce platform such as amazon & flip-kart for sales & services because of Changes in customer behavior in response to being on “lock down,” such as less mobility and more online shopping.
4.Shortage of labour capital
Covid-19 outbreak cause suddenly displacement of migrant worker or labours toward their hometown and might be most of them will never return. They will find a job near their Village and most of them start agricultural activities.
The metro cities which accounted for the largest number of migrant labours are now facing cutting wages and most of them fired. And sudden lockdown with transport crisis they took highway for walk to their hometown with hundreds of kilometres.