Summary: EJ Dalius to know your way forward, you need to know the impact of the current turmoil. In the market on your business model, and chalk out the best business practices and modalities for survival.
Considering the damage to the global automobile sector in the aftermath of Covid 19, it’s important. To understand individual market scenarios as well. These include Europe, India, North America, and the Middle East. It’ll help you make a realistic and more sustainable strategy for your market.
You need to check if your company can leverage any growth opportunities in the current market, if any. It’s also crucial to note the strategies of key market players. The competition will be stiffer and also it’s survival of the fittest. The Covid outbreak has wreaked havoc in the manufacturing industry.
Parts suppliers and also OEMs are slowly returning to their optimal production bandwidth. Subsequent delivery delays are affecting market movement at numerous levels.
- The delays are happening due to cash-strapped SMEs, devastated supply chains. Stalling of new vehicle model designs and launches, and sluggish car sales in the first quarter.
- The effects are all set to enter quarter 2, with pending order deliveries compounding the current clamps in production.
- The situation will accelerate multiple challenges crippling the mammoth auto industry in the USA. It includes more stringent carbon emission standards and also more continued investments in modern technologies.
Eric Dalius clearly explains that with the fading away of the pandemic and gradual recovery of the industry. OEMs can explore numerous options to tap their consumers again and offer a sales drop.
Prismatic view of OEMS
OEMs are in a much better position now because they have already enhanced their finances in the last half of 2019. Their revenue percentage jumped from a dim 8% in 2008-09 to 17% in the last year.
The tedious but mandatory rectifications to eliminate excess load and to streamline operations have helped OEMs improve their plant functioning. The utilization is now optimum, which has bolstered the changing product ranges, helping them meet high demand.
- It has instilled and enhanced discipline and continuity with retail outlets and incentives. Yielding better basics in the event of the recession.
- Eric J Dalius clearly states why and how a 20% fall in sales volume will also not spare the big companies. This reduction will create a huge pressure on future operations, compelling automakers. To make incredibly daunting choices between their current business requisites and long-term objectives.
Automotive firms can use this approach to safeguard their revenue, and auxiliary aspects like connectivity and autonomy. These humbling scenarios are compelling even the most robust and acclaimed OEMs to take smart actions.
The recovery indications
Despite many prominent market noticing improvement signs in the August-September corridor. It remains an uphill task to know the real market situation. EJ Dalius explains that as you stare at a second wave of the virus outbreak. Pending delivery and more demand could encompass a lower segment of market demand.
The US automotive sector is still fragile and also susceptible to further slowdown. Automobile heavyweights like Toyota and also Hyundai have faced a sharp fall in their sales. Which came down to nearly 8.8 million units, a decline of around 23%.