The Coronavirus Affect on Automotive Industry
As China started to shut its car manufacturing factories in January this year, the signs were ominous. The global automotive industry is in for a shock.
The coronavirus outbreak in Wuhan, China, has quickly spread to every corner of the world. With no immunity towards the virus, lakhs of people fell ill, and over a lakh lost their lives.
Wuhan, the epicentre of the coronavirus outbreak, is a car manufacturing hub in China. Major car brands of the world have their factories in the province. Honda alone is dependent on its Wuhan facility for 50% of its car manufacturing. When China started shutting these factories to control the spread of the virus, the global automotive industry began a downward path.
According to Global Data, in January alone, global new car sales have plummeted to 6.2 million units. Now, with countries like the USA, UK, Germany, Italy, and other major western countries shutting down their economies to fight the coronavirus spread, the face of the automotive industry is set to change.
Jobs, Savings, and Postponements
With factories shut, the supply-chain of car manufacturing has disrupted. People are using their savings to pass the corona tide rather than buying a new car. With little production activity, many workers are staring at potential job losses. From factory workers to salespeople, there will be culling of jobs.
In the Middle East, the impact of the coronavirus outbreak on the automotive industry is visible. Vehicle imports have plummeted. The little vehicle manufacturing activity came to halt thanks to the curfews imposed by the governments in the region.
In UAE, a nation which imports almost all of its cars has seen the lowest demand for automobiles. With the shutdown of the economy, the industry prospects are bleak. Also, the world economy is sure to pass into recession, with some economists predicting it to be worse than the Great Depression of the 1930s. If that is to happen, no one knows how the industry will transform.
Hope amid Gloom
A silver lining amid the gloom is China partially restarting its manufacturing facilities in Wuhan. Though the factories are not running at full-capacity, owing to the threat of virus resurgence, the partial capacity is enough for giving hope to the industry.
It remains to be seen for how long the major countries of the world will lockdown the economies and how long it takes for them to recover. Only when the demand rises in these economies, the automotive industry will bounce back.
The future remains uncertain for the world. And the automotive industry could be one of the most hit sectors of the world economy. Companies and governments must take drastic steps to recover from the slump.
Move to Digital
With the customers trapped inside their houses with their mobile devices, internet connections, and a lot of spare time, naturally these customers are on a constant lookout for entertainment and engagement activities to pass their time. Brand around the world are taking advantage of getting their potential customers attention in the hopes of achieving marketing objectives like, online user engagement, brand awareness and recall, lead generation and making revenue through online purchases by the customers online.
The pattern to notice over here is that every business is opening its revenue streams through online channels by creatively reaching out and converting potential customers online.
We here at ICS Dubai specialize in digital transformation of business's to help them thrive through the wave of recession. Reach out to us through our website www.ICS-Dubai.com to know the best way ahead for your business!