During this pandemic coronavirus situation, almost all of the industries got a setback. Because of the severe health issues, everyone suffered from this condition. Just like other industries, automobile companies also got economic crises. They face multiple challenges, but now they are trying to combat this issue. We don’t know how much time we have to live with this coronavirus, but we have to implement ways to make life stable.
Similarly, the owner of Carcover.com said it’s hard to predict how everything is going to come down in the future, but it’s becoming clear at this point that many changes will have to be made to preserve the stability of the market.
Therefore, in this regard, automobile companies and other industries have started by following the SOPs to keep themselves safe from the virus.
Challenges Due To Covid 19
The companies have suffered a lot and have met the following four challenges during this hard time.
Limited Supply Of Vehicle Parts
During the first lockdown, as everything was shut down, and everyone was afraid and avoided moving out it created a negative influence on the world’s economy. In that situation, the first challenge the auto industry met was the limited supply of vehicle parts. As there was nothing outside, people faced difficulty in getting cars or buying accessories. They couldn’t find car cover or other preventive things to keep their car safe, especially when they have to park outside day and night.
Moreover, the closed borders also increased the shortage of auto parts and resulted in limited supplies. The carcover.com claim about the increase in online order for this car accessory but unable to ship because of no delivery means due to the coronavirus.
Drop In The Sale Of New Vehicles
The pandemic corona not resulted in a decline in the sale of car accessories but also reduced the car sale. The curfews, less manufacturing, offices, and dealership all resulted un dismissal of workers have decreased the sale of the cars.
Car accessories are essential as they can be needed at any time. The drop in supplied affected not only the suppliers, but the consumers also faced trouble in getting the accessories. Similarly, there is a decline in car sales. A complete lockdown caused the abrupt decrease in the sale of cars.
Shut down due to the pandemic also forced the original equipment manufacturers to shut down their production. It reduced the overproduction and a need to secure the liquidity due to a decrease in sales. OEM previously shut down all operations in industries but now to overcome economic crises the automobile companies are operational again. They are implementing all standard operating operations to ensure safety of workers as well as to keep the environment safe.
The Decline In Working Capital
Last but not least challenge that the auto industry has faced a decrease in work capital. Due to the decline in demand, it resulted in a reduction in cash flow. Perhaps, there is a need to pay the salaries and short term liabilities so that employees can fulfill their basic needs.
Combating Strategies during Covid 19
Automobile companies are trying to overcome the economic crises that they met during the corona virus situation. They have adopted the following procedures to achieve the company goals in this hard time.
Management of crises
We all know COVID 19 has brought the unexpected variables that have resulted in unforeseen emergencies. Automobile companies are making specific plans to deal with these issues. Companies are applying the following tactics
Companies are leveraging a crisis management team that can mobilize the response efforts that will be beneficial for future transitions.
Stabilizing and making shifts to bring people back to work and assess the response towards the organization. Moreover, it will help in the identification of real-time course correction.
The last thing is to look at the organizational insights that help you focus on strategies. Plus, these are meant to capitalize on the opportunity for the transformation that is based on events.
In this hard time, to start a business with new strategies is somewhat tricky. The management has to call the workers to ensure that they will protect people and support them both physically and emotionally.
Try to communicate with the people and maintain the continuity of work by providing them resources and support. Moreover, explore the workforce levers to balance thepotential need to cut the cost. It is essential to keep them employed so preventive measures must be provided to them to continue work without hesitation.
Operations And Supply Chain
Although it’s difficult to model and assess the COVID-19 ripple effect, automobile companies are moderating the operations and supply chains. They are implementing the following strategies.
Identification of the alternative supply chain as new cases may emerge in other territories
Activation of pre-approved parts or substitution of raw material
Allocation of prices and customer strategies
The companies are also making a plan, and considering the digital transformation as a shift from remote to IT infrastructure will be helpful. Plus, it protects the growth through actions as the scenario planning that will improve resiliency and help in the incorporation of the economic impacts of the pandemic situation.
Moreover, companies are making considerations regarding financial and operational levers to conserve and generate the cash.
These are a few strategies that automobile companies are adopting to combat the effects of COVID 19. Handling such a situation has become important for the business, especially automobile companies.
The need for accessories like car cover is an all-time need. Therefore, the company is adopting the strategies to provide a healthy environment to workers so that manufacturing until it remains operational and people get the accessories on time. The company wants no delay; therefore, they are implementing pandemic crisis management strategies.