Coronavirus Outbreak Impacts Automotive Industry Across Verticals

Coronavirus Outbreak Impacts Automotive Industry Across Verticals

Features Corona Virus Outbreak Impacts Automotive Industry Across Verticals Pandemic COVID-19

The pandemic COVID-19 has wreaked havoc across economies and industries globally, with the Indian automotive industry also being affected heavily

The growth of COVID-19 that is caused by the coronavirus, which was identified to have originated from Wuhan, China, has definitely instilled fear across the globe and has affected all industries quite drastically. The automotive industry has been reporting a downturn over the last year, and this pandemic has only made it worse for the economy of this industry, as well as its ancillaries.


OEMs are experiencing low demand, and even that is being affected due to the low supply of components from areas that have been severely hit by this virus. Additionally, due to Governments directing industries to curtail their hours of working and cutting jobs, the ancillary industries sporting automotive have also been hit hard.

A report said that India’s automotive supply chain could be disrupted if coronavirus outbreaks persist longer. China and neighbouring countries in South-East Asia play a critical role in the automotive supply chain and domestic OEMs source critical components and sub-components including fuel injection pumps, EGR modules, electronic components, turbochargers and others from these markets, which in turn directly or indirectly depend on China. Furthermore, the delay in shipments from international customers is caused by the fact that their supply lines are facing the adverse impacts of the disruption caused due to the shutting down of manufacturing facilities temporarily in China.


Meanwhile, there has also been a view that the Coronavirus outbreak positions India as a production alternative to China, as per analyst from Frost & Sullivan. They believe that the Coronavirus outbreak is expected to have immense global implications—GDP growth will take a hit, oil prices will drop due to weaker demand, global interest rate cuts will deepen, and so on. The US-China trade wars had already prompted production relocation from China, with Southeast Asia attracting a lot of businesses. The virus outbreak in China is expected to intensify production disruptions and relocation away from China, and India could reap gains with the right set of policies, noted the analysts. Factors such as recent hefty corporate tax cuts in India and the relative strength of the Indian economy place India in an advantageous position.


The Indian automotive industry has definitely been affected by this virus outbreak, from the dealership front, right up to supporting ancillaries. Various industry bodies have also reached out to the Central Government is aiding them with loan interest holidays and other methods to help them pass this difficult situation. The mass shutting of factories has put a strain on the workforce, which requires financial aid to support their families during this difficult scenario.