Coronavirus and its impact on the Auto industry

The coronavirus is a pandemic that has disrupted almost all of the industries in the world and brought movement into a standstill. This is particularly bad news for the Auto industry in India more so as it was already going through a bad phase. The year 2019 in itself saw a major slump in the demand for automobiles and many companies had to bear losses because of that. They were relying on this year to improve the sales numbers. We look at the impact that the virus has taken on the industry.

Delaying of product launches

2020 was going to be a big year for the automobile industry in the launching of new products. Several automobile launches were due in the country.

The Auto Expo that was held in Delhi had many new promising cars that were showcased to be launched in the coming months. Many iconic cars such as the Mahindra Thar and the Force Gurkha were going to get a makeover and even other cars such as the Skoda Karoq were going to be launched. All of these launches will get delayed due to the Corona Virus. This will include the cars that were also due for updates in the BS6 region.

Automotive parts

China accounts for 27 per cent of India’s automotive part imports and since the factories have been closed the supply chain is affected. Even other companies like Volkswagen or Skoda that get a lot of its parts from Germany have been affected due to this as well.

Coronavirus numbers

There has been no one who will benefit from the situation but manufacturers such as Toyota and Hyundai that had gotten an earlier start on their BS6 vehicles seemed to be affected less than other manufacturers. Total two-wheeler sales fell 39.83 per cent year-on-year to 866,849 units due to the Corona Virus.

Coronavirus long term affects

Due to so much general decline in the economy, the effects will be felt long term and the complete recovery of the industry will take some time. The entire supply chain will be affected due to this and certain manufacturers have announced that there could be delay payments to its suppliers which will cause further disruption and the industry of automotive parts is also affected.

Companies helping dealerships

Many manufacturers have started taking online bookings for their cars and have started this new kind of facility on their page. The companies are also helping out their dealership networks all across the country that have taken a huge hit.

Companies such as Toyota and Skoda have announced relief packages which will ensure that the dealerships shall remain in liquidity and financial help will be provided to them. This will ensure that the dealership networks do not stop once the lockdown has been lifted.

Discounts due to Corona Virus

Do not expect mass discounts across all brands or dealerships across the country. The discounts on cars will depend on the supply chain in itself and although certain discounts can be expected there is no guarantee as there will also be a surge in demand once the lockdown is lifted due to people preferring to travel in their automobiles rather than public transport due to sanitary reasons.

Companies donating due to Coronavirus

It is also good to see that almost all of the companies even in these troubling times are donating to hospitals and the PMs fund as well. The donations are through financial help and also in helping out through donating the necessary sanitary products.