Coronavirus impact on auto industry
Coronavirus outbreak across the world has hit the auto industry hard, which was already suffering from the prolonged global slowdown. Several auto companies across the world have shut their plants in a bid to contain the virus outbreak, while some auto brands came forward to help the governments and health workers by making medical equipment.
All major automakers announced shutdowns complying to the lockdowns announced by the governments in order to contain spread of the Covid-19 virus. In India too, the automakers announced plant shutdowns when the government announced a complete lockdown of the country for 21 days till 14th April 2020.
According to an estimate by Society of Indian Automobile Manufacturers (SIAM), the plant shutdowns caused by the Covid-19 and the resulting lockdown imposed by the government is leading to a loss of Rs 2,300 crores every day, for the Indian auto industry.
Due to the plant shutdowns and lockdown, more than 25,000 employees across various automakers in India, have been asked to work from home as a preventive measure against the Covid-19 outbreak. These auto company executives include 7,000 from Mahindra & Mahindra, 3,000 from Tata Motors.
The 2020 Geneva Motor Show, biggest event on the global automotive calendar was cancelled just five days ahead of its scheduled start on March 3, due to the coronavirus outbreak. New York Auto Show too got postponed till August 2020 due to the virus outbreak, while organisers of Detroit Motor Show has cancelled the event for this year.
The 2020 Delhi Auto Expo saw the biggest participation of Chinese automakers, but due to the Coronavirus scare, Chinese officials were not part of the event. Instead Indian officials represented the brands at the event.
Like the OEMs, auto component manufacturers too have been facing difficulties due to the Coronavirus outbreak and the lockdown imposed because of that. The Automotive Component Manufacturers Association (ACMA) has estimate that the Indian auto parts maker industry is facing around Rs 1,200 crore production loss every day due to the current crisis.
Adecco Group estimates that the Indian automobile industry can slash up to a million jobs across the dealerships, front-line roles, and the semi-skilled workers. Xinhua quotes Ferdinand Dudenhoeffer from the Institute for Customer Insight (ICI-HSG), who forecasted that auto industry in Germany will be significantly damaged by the Covid-19 crisis in 2020 and beyond and it could result in loss of over 100,000 jobs in the country. This means 12% of current 830,000 jobs at German auto industry.
Several automakers have came forward to help the governments and health workers by manufacturing medical equipment. In India, automakers like Maruti Suzuki, Tata Motors, Mahindra & Mahindra, TVS Motor Company have announced they will manufacture hospital ventilators, respirators and Personal Protective Equipment (PPE) for the frontline health workers.
General Motors and Ford have partnered with Ventec and GE Healthcare respectively, to produce hospital ventilators after the criticism of US President Donald Trump, who ordered the two auto majors to produce critical medical equipment under Defence Production Act. GM aims to make 10,000 critical care ventilators every month along with 50,000 masks per day, while Ford said it will manufacture 50,000 ventilators in next 100 days.
Daimler AG and Continental AG have postponed their Annual General Meeting (AGM) due to the coronavirus crisis.
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