What Is the Impact Of The Coronavirus On The Automotive Industry In Australia?

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What Is the Impact Of The Coronavirus On The Automotive Industry In Australia? 6 Jun 2020

The outbreak of Coronavirus (COVID-19), which first enter Wuhan, China in December-end 2019 and significantly spreading its arms all over the world. It is also exclusively affecting the automotive industry of Australia too. However, this pandemic has put a brake on the production of the Automotive sector.

As per the Hyundai report, 50% of vehicles introducing in the coming months have been delayed. You know why? Due to the Chinese parts shortage during COVID-19.
The third-largest brand of Australia – South Korean manufacturer, heavily depends on the parts supply by China. Due to the closure of factories in China, there is a dreadful effect on the availability of OEM and spare auto parts for cars in Australia.

As an indication of the United Nations Comrade database, Australia imports from China about $85.9 billion in 2018. The Automotive industry is largest affected sector in this outbreak.

What Does the CoronaVirus (COVID-19) Mean for the Spare Parts Industry?

While the coronavirus will have an exclusively dreadful effect on the production of new vehicle producing. However, this will be a challenging situation for new car manufactures. Isn’t it? There is no doubt that, there will be a shortage of OEM and car parts for maintenance on existing vehicles.

Here, at Qld Car Wreckers Brisbane we have OEM parts in large quantities because we have Chinese manufacturing plants, including Brembo Brakes, Zf, Valeo, and Bosch. In spite of the closure of all factories, Brembo’s Chairman Alberto Bombesin has said “the quick effect is extremely constrained…” and Valeo is detailing that they have not experienced any operational effect with the outbreak of coronavirus in Wuhan. We can’t ignore the fact that their factories still remain shut and have been since the new year Chinese.

How are European Made Cars Affected?

Even though European vehicles such as BMW, Audi, and Volkswagen may be produced in Europe, they also depend on parts that are made in production lines in China. They take approximately 30,000 spare parts to complete the target of automobiles. The only one small missing part can have the power to disturb the whole supply chain i.e. If the supplier of china doesn’t give a valve to them then the car manufacturing industry will not receive any tire in Germany. However, they will not be in a position to supply the tires to their customer.

How to Manage Drooping Sale of Vehicles?

  • Make sure to have communication with your customer via online and mobile channels.
  • Do efforts on leads generation through online car customization tools used by prospective buyers
  • Adopt implementing a contactless sales process to meet health and hygiene safety requirements.
  • In the post-crisis phase, Dealers might need to reduce their prices of stock. But focus on discount policies to make the balance with market share, profitability, and brand image.

The Bottom Line!!

The COVID-19 pandemic muddles the whole business cycle and toss the whole world’s economy into vulnerability, the car business is on the bleeding edge. The absolute most influenced areas are significant creation centre points and home to enter interfaces in the segment’s worldwide flexibly chain.

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