How Coronavirus has affected the global automobile industry. An Insight

All of us are now aware of the global pandemic that is troubling the globe. People in the whole world are worried about the deadly disease and are practising social distancing as a safety measure. Coronavirus has badly affected the world economy until now. Needless to say, the virus has taken a toll on the global auto industry too! Here we take the road. The Corona outspread started in December 2019 in Wuhan, China. Major parts of the world are now affected due to this virus. The economies are struggling and the markets have slowed down. The coronavirus has affected almost all the industries and needless to say the international automobile industry is one of them.

Here in this article, we see how the coronavirus outbreak has affected the global automobile industry. Starting from the first month of 2020, the automakers internationally were struggling with the manufacturing and assembly lines. Somehow they managed to keep the processes live but due to the outbreak getting serious each day, the automakers have shown concerns for the personnel and slowed down the processes accordingly.

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The coronavirus outbreak has affected the automobile market in multiple ways. The production has slowed down, the showrooms are experiencing fewer footfalls. People are not willing to move or travel therefore the sale number for both the vehicles and the fuel has fallen dramatically! We have seen major automakers cancelling major press conferences and launch events to avoid the gathering of people at a single place. Either the launches have been pushed or done online. None of the companies wants to put their employees or the media at risk by organising large scale events. Let’s have a look at the past. Not going too far, we will see how this microorganism has put the global automobile industry in a slowdown!

• 28th February 2020 | Geneva Motor Show Cancelled
  

  

  The Geneva Motor Show is the biggest automotive show in the whole world. This was the starting phase of the coronavirus which was about to affect the global automobile industry badly. The show was planned to be started on 3rd March 2020 but due to the confirmed COVID-19 cases in Geneva and other parts of Switzerland, the organisation had to cancel the 2020 Geneva Motor Show.

• 12th March 2020 | Australian GrandPrix Cancelled
  

  

  The Australian GrandPrix was cancelled just hours before the practice was about to start. McLaren had already quit the event as one of their teammates tested positive for the coronavirus. Fans had already queued outside the street circuit in Albert Park, Melbourne. This was the second blow that the coronavirus outbreak gave to the international automobile industry. The people who made the decision included the FIA, the F1 bosses, Australian Grand Prix organisers and the 10 teams.FIA said addressing the audience “This is very disappointing news for the thousands of fans due to attend the race and all ticket holders will receive a full refund and a further announcement will be communicated in due course.”

  Along with this, Toyota released a statement in which they said that they were prepared before the spread. They were ready to protect each and every stakeholder right from the manufacturer to the dealer. Toyota said that they had monitored the situation very closely and were all set to follow the government guidelines to protect the necessary protection.

• 13th March 2020 | Daimler Postponed Annual Shareholders’ Meeting

  Daimler organises an annual meeting of all the shareholders on April 1st every year. This time, realising the alarming situation, the automaker has pushed the meeting with no further notice. We know that it’s not happening on April 1st but we don’t have any other update as of now. This is how the coronavirus has affected the global automotive industry.

  

• 15th March 2020 | Tata and Fiat Provide An Update

  On 15th March 2020, Tata Motors PR released an internal memo stating how the automaker has laid down the 3-tier protection for all its employees at the production facility to reduce the risk of coronavirus. Fiat announced shutting down of factories till March 27. Ferrari and Brembo followed.

• 16th March 2020 | UK follows China & Ford Gives Major Update

  The UK government proposed a plan to the major automobile manufacturers like Honda and Ford to produce ventilators in their UK production facilities. Many automakers in China have already been doing this after the spread of the COVID-19 in their country. The Chinese carmaker BYD has converted its production lines at the Shenzen facility to produce face masks and disinfectants.The fact to surprise is that this facility produces over 300,000 bottles of disinfectants making it the largest producer in the world right now!

  Ford closed their factory in Valencia, Spain because 3 coronavirus positive cases were found at the facility. Talking about India, Ford has allowed most of the workforce (which means over 1 lakh people) to work remotely in order to assure a safe and sound environment. All those who are not in the critical business role were advised to be away from the facility and work remotely from their respective homes. A PTI report has it that the Ford India spokesperson added, “All necessary safety measures have been deployed at Ford locations as well as our dealerships to ensure minimum inconvenience to customers.”

  

• 17th March 2020 | Major Automakers Allow WFH Worldwide
  

  Mahindra announced WFH policy for desk staff from 18th -31st March whereas those involved in production and R&D continue to operate normally.

  FCA operates through 3 locations in India. The corporate office is in Mumbai whereas the engineering office and the manufacturing facility at Chennai respectively. The automaker has announced ‘Work from Home’ for its Maharashtra staff. They are very active towards social distancing which is definitely the need of the hour. The Chennai staff still remains working though and is still under consideration for a possible outcome. The government has suggested to let the employees work from home.

  

  Volvo has also followed the guidelines and implemented WFH facility thereby maintaining the business continuity through video calls. Federation of Automobile Dealers Associations (FADA) has approached the Supreme Court of India to push the sales of the BS4 vehicles till May 31st because of a sudden drop in the number of walkins and the resultant sales. The Coronavirus has affected the global automobile market and therefore the BS4 stocks in India are still piled up with the dealers/ manufacturers. Many dealerships are on the verge of closure due to the losses because of the lockdown issued in various cities.

• 17th March 2020 | Some More Important Decisions

  Ford decided to give up production in all the factories across continental Europe from 19th March 2020. This decision has affected two plants in Germany and one in Romania. The automaker added that while the facilities remain closed, the dealerships will still provide the essential maintenance and service across the continent.

  The Volkswagen Group also shut down its plants across Europe and in India too, the Chakan plant is observing 3 no production weeks. Though this shutdown is to prepare the production lines for the new set of models based on the new MQB A0 IN platform that will drive the global major’s ‘India 2.0’ strategy in the marketplace.

  

  The automaker had to close its warehouse in Gurgaon after the government issued a health advisory. Some dealerships have also suspended the operations in this state of crisis. The automaker is already preparing itself for the challenging and tough situation ahead. The people will not prefer buying a vehicle at this time considering the pandemic situation. Everyone knows that.

• 18th March 2020 | More Automakers Join the Bandwagon
  

  Rolls Royce announced that they will be shutting their Goodwood plant down. This 2-week closure will be followed by the yearly Easter maintenance break. The non-production staff continues to work remotely. Porche also announced a similar thing to be practised from 21st March 2020. This was done to ensure workers’ safety. Also, there were many bottlenecks in the supply chain management due to which they were not able to produce uniformly.

  Toyota and BMW planned to shut down its facilities across Europe while Honda decided to shut all the plants in North America due to the anticipated decline in the overall demand. The move will affect plants in the USA, Canada and Mexico. The staff will be paid full wages during this period though.

  The Tesla factory in Fremont, California had to be closed after being classified as a non-essential business. Meanwhile, Volkswagen launched its T-Roc in India. The launch was done online through digital means to maintain social distancing. VW had earlier launched the Tiguan All-Space in Mumbai on March 6th 2020.

  

• 19th March 2020 | Hyundai, Ford, GM Shut Down Too.

  Hyundai shut down the Alabama facility after a worker was tested positive. The automaker says that they need to sanitise and clean the facility properly to ensure a safe working environment for the employees.

  Ford and GM have also shut down operations saying that they will also clean and sanitise their facilities at the USA, Canada and Mexico. Though some of them have closed down due to supply chain issues too. Honda has stopped production at the Uk plant saying that they plan to resume on 6th April 2020.

Talking about India, over 25,000 employees who form the backbone of the Indian automobile industry are working from home. The current number of coronavirus cases in India have already crossed 200 with 4 deaths as of now. The number is increasing every hour. We hope that the situation is controlled as soon as possible. To do that, social distancing is really important which is why people are not there at the offices or the facilities. This has lead the coronavirus to affect the global automobile market.

While the OEMs are trying their best to ensure a safe working environment for their workers, we cannot expect the situation to get normal as the demands have already fallen drastically. The world is going through a bad phase and we, the human race will have to support each other in every possible way till this bad phase passes away.

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