Automotive Industry Strategies Post COVID-19
The automotive industry is one industry among others that has been facing a constant storm for two years. The CASE megatrends caused considerable issues in the industrial models as owners witnessed the Connected, Autonomous, Shared, and Electronics movement and two successive years of the environmental movement. This was not the end. As the automotive industry stepped in 2020, the COVID-19 pandemic outbreak took the already demanding circumstances to a whole new level. As a result, the procurement subcontractors have been put under constant pressure disrupted demand and supply chain at an unprecedented rate and on a global scale.
The automotive industry, as a result, must navigate in a completely new scenario. Considering the new impact areas, you can think about the following possible scenario:
Supply chain management
When China was hard hit by the pandemic outbreak in the early 2020s, the initial impact was faced by the supply chain. Since most of the supply chain organizations are directly or indirectly linked to China’s supply chain, the capacity soon started to evaporate, impacting the supply chain management on a global scale. As an expected result, suppliers started facing dire consequences as they were facing liquidity problems, and therefore, succumbed to the market conditions. The supply chain’s balancing act is only capable of providing cost-effective support by applying lean methods in normal operating conditions and does not respond well when subjected to disruptive conditions.
Therefore, sourcing agents across the world need to have a renewed focus on the following perspectives:
- Near-real time and deep visibility across tiers
- Advancement in risk monitoring and modeling aspects
- Component substitution process
- Capability to detect an early event
- Automation ready procedures
When focused on these areas, the automotive industry will most likely build into a more flexible supply chain alongside building cost-efficiency.
Enhancing the relationship between the customer and computerized processes
The pandemic outbreak will directly impact the interactions between consumers and physical stores. The basic reason being the choice to not get out of the homes to avoid infections and the other reason could be the regulatory mandates. This means sourcing agents will have to increase the interaction with their potential customers through digital mediums. Industry owners will increasingly engage with their prospects in a computerized way. Most likely they will put effort into accelerating digitization procedures and eventually invest in marketing platforms. They will also adapt to practices that involve digital customer engagement.
Changing behavior of the customer and social distancing
Customer behavior towards consumption will shift to a new level even after the pandemic gets over. They will likely prefer working from home and avoid large events, resulting in decreased mobility requirements. Car-pooling will essentially decrease probably due to safety and health concerns of customers. These environmental changes will definitely have a huge impact on the purchasing decisions of customers.
If automotive industry owners and procurement subcontractors can understand the emerging behavior of consumers and create personalized solutions, this will help them achieve their success factors.
It is more than a century that the automotive industry has been facing constant pressure. But it has always adapted to the changing environment and market conditions through resilience and innovative solutions. The strengths mentioned above will surely help them emerge stronger.
