Impact of Covid-19 on the auto industry

automobile

Coronavirus originated in China’s Wuhan in December, gradually spreading its tentacles all around the world. This unfortunate pandemic has locked us into our homes and disrupted our whole lives. It has severely impacted different sectors of the society and economy. One of the majorly affected industries was the auto industry. With almost all countries undergoing lockdown, production came to a halt, customer footfall in showrooms took a deep dive and vehicle sales fell drastically.

The coronavirus impacted automotive industry in the following ways:

  • A whopping amount of automotive parts are imported from China by Indian manufacturers and China being affected by coronavirus majorly, the supply chain was disrupted.
  • With the lockdown being implemented all over India in the latter half of March, production came to a halt.
  • The global vehicle sales were down by 39% in March 2020. Only 55.5 lakh units were sold as compared to 90.3 lakh in March 2019 due to lockdowns in various countries.
  • First time in history, all major automakers like Maruti Suzuki, Hyundai, Mahindra, Tata, Honda, Toyota, Ford, Renault, Nissan, Volkswagen, FCS, Skoda, Kia, MG, reported 0 domestic sales in the month of April 2020.
  • TVS, Bajaj also reported 0 domestic sales in April 2020

The automobile industry witnessed a great downfall in the past few months but the automakers have gradually started operating & adapting themselves to the situation. The manufacturing plants have opened up and production has been kick started. Other measures are also being taken by the companies to function in these difficult times.

  • Some automakers have introduced online booking of test drives, booking of car and doorstep delivery.
  • Pick and drop car service facility for existing customers.
  • New operating plans are being established for dealerships including extensive precautionary measures.
  • Disinfection and cabin cleaning, exterior cleaning and general check-up facilities are also being offered by some companies like Audi.

In spite of the operational disruptions and almost no sales, many automobile manufacturers extended their support to the country through donations and other efforts. Major efforts were made to help those in need.

  • The employees of Skoda Auto Volkswagen India raised over 1.2 crore INR to fund ventilators and PPE kits by contributing their 1 day salary. The company also donated an amount of 22.34 lakh INR to Sassoon Hospital, Pune. They also offered 21 tons of ration to families in villages like Khed and Bhosari.
  • Yamaha India’s employees also contributed to the relief efforts with 61.5 lakh donation raised by contributing their 1 day salary.
  • A contribution of 2 crore INR was made by Fiat Chrysler Automobiles for covid-19 relief. The company also partnered with a few NGOs to provide essential items to people in need in Mumbai as well as Chennai. It also supplied medical equipments to Voluntary Health Services hospital in Delhi & Naidu Hospital, Pune.
  • A significant donation of 7 crore INR was made to the PM CARES Fund by Hyundai Motor India and another 5 crore INR was donated to Tamil Nadu Chief Minister’s Relief Fund. The company was also involved in the provision of PPEs and distribution of dry rations to those in need.
  • Maruti Suzuki made use of its manufacturing facilities to prepare food for the nearby communities. Over 1.2 lakh food packets were distributed by the company in the first few weeks. They indulged in distributing dry rations in villages and made water available at very nominal prices across 16 villages through their ‘water ATMs’. A contribution of 16 waste collection vans to sanitize villages in Manesar and Rohtak, face masks & other equipment was also made with help of Gurugram administration.
  • MG Motor India has collaborated with MAX Ventilators to increase the production of ventilators by almost 5 times to 300 units per month in start and later on increasing it up to 1,000 units per month according to the demand. 100 units of Hector SUV were offered by the carmaker free of cost with fuel for delivery of essential services across the country.
  • Triple-ply face masks are being supplied by Krishna Maruti (a joint venture of Maruti Suzuki) to the local authorities. They have pledged to supply 1 million in-house produced masks to the Haryana & Gujarat government each.

According to several reports, increase in usage of private vehicles is forecasted owing to the safety concerns of people. But the second-hand vehicle segment is expected to capture a larger share than the automobile industry. Mainly because people would be willing to spend less due to the dent in their pockets. The coming months are not going to be easy for the carmakers but they are doing their best to rise to the situation.

Also read:
Car Care in these unprecedented times

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