Impact of Coronavirus on Automobile Industry– The corona outbreak had affected many sectors and the automobile industry is also under its effect. Due to lockdown, the supply chain is badly disrupted.
China has almost 27% of India’s automotive parts including imports of all the auto parts and the few producers of auto part components like Robert Bosch, Valeo AS and many others have installed their production units in the Hubei province of China. Due to the closure of all these units after the outbreak, there has been reported a delay in the production and supply rate of the vehicles as well as their components.
Though the Indian Government has revised it’s automobile policies in which they stated that after 31st March 2020 the selling of BS-IV vehicles is totally prohibited and only BS-VI level vehicles are allowed across the country whether the vehicle is imported from any country or it is manufactured within India.
The sales rate of almost every company had declined due to this pandemic as the lockdown resulted in the shut down of all the public places and thus it shutters down all the delivery units of the companies.
In Europe, the global sales of Dacia companies have reduced by 40% in the first quarter of 2020.
In the USA, it is projected that the global sales of vehicles will be reduced by 26.6%.
In our country, several automobile companies face tough competition among them on the basis of safety, fuel consumption, vehicle capacity, and the on-road cost of the vehicle. Some of the leading competitors which operate in India were Tata Motors, Hyundai, Honda, Mahindra and Mahindra, Toyota, Suzuki while some overseas companies BMW, Audi, Mercedes, KIA Motors, Morris Garage, Volkswagen Group, etc. Due to the lockdown as per the reports, the vehicle sales of Hyundai has been declined by 41% in March 2020 while the sales of Tata Motors have reported a decline of 12% in 2020.
Automobile Companies have rebooted their operations
This outbreak has resulted that the majority of the auto companies started their contribution to the manufacturing of essential medical kits and other equipment.
Hyundai Motors has extended their support to the Govt of Delhi, Haryana, Maharashtra, and Tamil Nadu by providing 17,000 PPE kits and approx 20 lacs face masks of different varieties including N-95 and over 1.5 lacs sanitizing kits as well as 6000 dry ration packets as well as they donated a sum of 7 crores to the PM Cares Fund and they also partnered with Air Liquid Medical System to increase the production and supply of ventilators in India.
Maruti Suzuki India Limited (MSIL) has already begun to supply the face masks to their local authorities of the Haryana and Gujarat region. The company is also working with the Red Cross Society in order to fulfill the essential needs of the locals.
Mahindra and Mahindra also began to produce the face masks and hand sanitizers in their Telangana situated plants and they had also developed the low-cost ventilators named AIR-100 and then delivers them to the local authorities.
MG Motors India has announced that they will provide 100 units of Hector SUV free of cost to the corona warriors which are involved in the delivery of essential services. BMW Group India has donated a sum of 3 crores to the PM Cares Fund to fight back against corona.
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Various companies have extended their warranty services to prevent customers from getting outside of their houses. The Australian Grand Prix, Geneva Motors Show, Formula-1 race, and many other events have been cancelled due to this outbreak and it is estimated that India more than 25000 of the executives are working from their homes to reduce the spread of COVID-19. According to Animesh Kumar, Director of Automotive Consultant at Global Data stated that most of these employees belong to the original equipment manufacturers (OEMs) including Ford, Tata, Mahindra, Volvo, MG Motors and Volkswagen Group.