Due to the novel coronavirus that hit the globe in early 2020, many industries were hit hard. It’s not different for auto companies as major companies made untold losses.
The impact hit across the industry, not leaving behind companies that selling damaged cars. Since the world wasn’t ready for this, such a company dealing with less than perfect cars also felt the effect.
It experienced losses from Covid-19 but the future is still bright. The company sells junk cars, but business hasn’t been as usual since the pandemic hit.
Apparently, the sale of damaged cars has been on the rise during this pandemic with people feeling the cash crunch in their pockets. So, you can sell your damaged car instead letting your backyard babysit it.
It’s a time when customers are hesitant to spend on new cars because of the uncertainty. However, auto companies will overcome this and come out stronger.
Some Covid-19 Stats
The auto industry employs 59 million people globally, contributing to $5.5 trillion to the global GDP. However, things had to change for the worst in the wake of the novel corona virus.
Businesses shut down, workers were laid off, and losses become the order of the day. COVID-19 pandemic continues to wreak havoc in this major contributor to the global economy.
For instance, it’s the result of the reduction of 2020 global automotive sales to a whopping 20%, and in the worse event, 40%. However, all hope is not lost since it’s evident that some parts of the world are re-opening.
For instance, in Asia, a notable rebounding of auto companies can be seen even though the focus is now on online sales. Also, auto companies are acting fast to develop operations and financial aid as early as now.
How Auto Companies Can Overcome Covid-19
In a bid to enforce restrictions to curb the spread of the virus, auto companies had to look into their workforce. Maybe coming up with measures to protect onsite workers needed to complete the job would be a sustainable solution.
According to the Bureau of Labor Statistics, US auto companies and suppliers employ more than 1 million people. Efforts to make the workforce work remotely bore no fruits. Since most of them work in assembling plants and factories, other strategies had to be implemented.
- One, the workers needed information on how they can protect themselves from the virus. Also, the part that’s working from home needs to be protected from cyberbullying. Auto companies improved cybersecurity since the management is part of the remote workers.
In as much as travel restrictions prevail, auto companies have to rethink their strategy. For instance, auto exports have gone down since the virus went out of control. Though this is a challenge, it’s an opportunity in disguise.
- Today, people have realized the need for local auto companies. Manufacturing internally is on the boom since everyone is looking closer to home for that luxury vehicle. Well, the COVID-19 is a challenge, but, look, the opportunity it presents for local auto companies is worth noting.
Sourcing auto parts like tires, paints, and assembling parts can be a relief, especially in these uncertain times.
- Have you noticed that there’s hope for auto companies despite everything? A good example of a company that’s reviving its business is the Japanese car company Toyota Motor Corporation.
The company has cut production by 3%, which is an improvement from 40% in June and 10% in July. As easing of restrictions and businesses begin retaking good shape, the company will definitely do better.
- So, how do can auto companies outlive the virus? The digitization of the auto space should be a priority to the companies. For instance, online shopping is rampant in such times when gatherings and contacts are a thing of the past.
Evidently, some auto companies have adopted this system and are doing their thing online. It doesn’t have to be solely selling, no. Replacing their onsite workers with digital systems is here to stay. You will be surprised to see these innovations dominate even after the virus is contained fully.
- Statistics show growth potential in auto companies. Due to social distance measures, most people don’t want to share public transport anymore. Taxi-hailing services are also not so common.
In the US specifically, a spike of 18% in sales of new cars as well as 45% of deliveries of luxury can confirm this.
How is it for Giant Auto Companies?
Following successful containment measures, China reopened its auto companies in April. As of now, the losses experienced in the country have been recovered. According to the China Association of Automobile Manufacturers (CAAM), a narrow decline in auto sales and production was felt from January to June.
Giant companies in the world are looking for options to do business before normalcy resumes. An excellent example is Mercedes-Benz. This company is now partnering with a Chinese company, Contemporary Amperex Technology, to continue its battery-powered plans.
China has the biggest market for auto markets and the best auto suppliers in the world. As a result, foreign companies across the world are finding it safe to invest here. Since times are uncertain, it’s wise for them to take advantage of the Chinese flexible local and national policies.
The Recent Auto Show in China
China hosts powerful auto shows, and the most notable one happened in 2018. However, this year things changed due to quarantines and restricted international travels.
Therefore, major auto companies had to look for options to participate in the auto show. The China International Fair for Trade in Services took place in September.
Auto companies such as Ford Motor Co, General Motors Co, and BMW AG appeared in videos for the autoshow. They also partnered with Chinese workers who worked full time to facilitate their automobile displays.
It’s also worthmentioning that some auto companies are trying their best to devise ways to cut costs. Fiat Chrysler Automobiles VA and PSA Peugeot plan to merge in that effect. When they do that, they will form the 4th largest auto producer in the world.
Conclusion
Auto companies have a perfect opportunity to recover the losses that Covid-19 has caused. And on top of that, come out stronger than before.
By coming up with fast and efficient strategies, the companies will outlast the virus. It’s evident that the US and Europe auto markets have declined over the months, but there’s hope still.
We have seen several partnerships China has made with some of the companies. So, this shows the world all isn’t lost. It’s time to pick the pieces and embark on a recovery phase.
Auto companies have vast rebound potential, only if relevant measures, plans, and systems are put in place.