Automobile Industry Post COVID 19
The corona outbreak severely affected the auto industry-leading us to an unprecedented environment where the new automobile sales in India are predicted to fall by approximately 45%. Industries like textiles, retail, and automobile are facing uncertain scenarios and are going through several market transitions where managing future investments and production is the key to survive through the pandemic. Companies around the globe have frozen hiring and expenditure on discretionary fundings. The key is to preserve profits for the new transformation in the automobile industry. Some companies may even choose to take a strategic call to exit unprofitable markets and vehicle segments. Prolonged truncation of consumer demand due to the lockdown is seen significantly affecting auto manufacturers (OEMs) revenues and cash flows. Many US car companies are coming up with loan protection plans. Consumer loans will not be in jeopardy if their employment situation is unstable.
Car companies will have to restructure their norms and operating styles in order to fix the damage. As mentioned by Mark Fields, former Ford CEO, the big question of visibility for sales will be consumer confidence, he further states that supply chains have no emotion or fear and can be fixed but that’s not the case with consumers. Companies should offer additional benefits like assurance incentives and zero interest rates in order to uplift low consumer confidence. Companies are still expecting a steady rise in new car sales alike China with a ray of expectation that consumers will disincline with shared means of transportation. After nearly zero sales in the month of May; companies like Hero Moto Corp, Maruti Suzuki were successful in getting a large number of units out after the lockdown was lifted in June. Sales were surprisingly from semi-urban and rural areas.
Automation & digitization
Companies that invest in digitization in the future are going to reap the fruit. Softwares enabled with IoT, artificial intelligence will be an integral part of the new normal. Showrooms should be replaced by online marketing sites equipped with VR platforms and video stimulation that can provide zero physical contact delivery.
Shared Mobility Services
The pandemic had a pernicious influence on shared mobility services like Ola and Uber. The services came to an absolute halt and still, there is no sign of progress three months after the outbreak. Creating contactless commuting and incorporation of additional precautions is certainly going to increase the cost of operation and consequently the fares. The monopoly of price sensitivity will be under threat and thus demand for shared mobility may decrease significantly.
Time to accelerate EV plans-
As the ideas of hygiene and health have become stakeholders in general. It is an amazing opportunity for electric vehicles to kickstart in the country. Sustainability and zero-emission engineering are ideas of the future. The electric car is here to stay and promote a greener economy. The auto industry’s step towards electrifications seems to be on track and will be an important contributor towards keeping our planet safe.
Contributed By- Madhvan Dikshit, Content Writer @ Mitti Ke Rang
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