May 6: Most of the business sectors all across the world experienced a big hit since the coronavirus outbreak, and the automotive industry is no exception. When it comes to the automotive industry, we’ve seen constant growth over the last couple of years until the COVID-19.

Since the virus is not going to disappear instantly, we should be ready to introduce new regulations and work principles after the lockdown. This year is going to be tough for vehicle manufacturers, but production must go on even when the situation is not cleared up completely.

The automotive industry in India experienced an 18% decline year-to-date compared to last year. These challenging times for the Indian automotive industry will be responsible for the slow economic growth. Besides negative consumer sentiment changes to the axle load norms, which will lead to liquidity issues, and potential bankruptcies.

However, the world must continue to function, and normal daily life will be back sooner than you think. In some countries like China and South Korea, which were highest on the heat map of coronavirus, started to function normally by opening most of the automotive factories across the country. The same thing is expected to happen in India in the near future, which will lead to U-Shaped economic recovery.

What about the automotive sector?

When it comes to the automotive sector, things cannot go back like they were quick. Experts predict full economic recovery in the automotive industry by the third quarter of 2021. Despite the recovery, the economic effects from the virus will still be visible as they also predict a 15-25 percent decline in profit in 2021.

The world will not be the same after this pandemic, and industries all around the globe will introduce new ways of working focused on individual health, cleanliness, and hygiene. The automotive industry is not any different.

When it comes to changes in behavior on customers, the automotive industry should be more focused on personal mobility, rather than shared mobility. This also leads to increased demand for new vehicles as a solution to public transport.

Indian automotive suppliers will face the biggest problems since there are lower domestic sales, which will lead to lower revenues. The automotive market is connected globally, so the lockdowns in Europe and North America will also lead to import and export limitations. Experts predict that this sector in the automotive industry will experience the biggest hit until 2021.

Automotive businesses must react faster than a horse in the Kentucky Derby race and come up with short-term and long-term strategies in order to get through the Covid-19 crisis and to minimize its future impact. In other words, the next six months will be crucial to stimulate the supply chain scenarios. They should go through devise support plans for high-risk dealers and suppliers with plans that will improve liquidity and reductions of costs.

When it comes to dealers, they must find a different way to approach customers and provide contactless experience with a lot of information about their products. As we know, social distancing is one of the ways to battle with the latest pandemic, so providing digital solutions for dealers to show their product to customers is the only way to make sure they provide the necessary payment inflow. They need to build a digital platform where customers will find all the required information without going to the dealership.

The Covid-19 crises will last for at least a year, and the aftermath from it will be devastating for the economy. That is why crucial to make fast decisions in order to lower the long-term impact of the pandemic. All things in the automotive industry are stopped as well as the most awaited Geneva Motor Show where huge car manufacturers promote their latest vehicles.

It is going to be a tough time, especially for smaller vehicle manufacturers, since they do not have the necessary capital in order to sail across the rough sea.