Driven by technological and regulatory changes in the recent past, globally the automotive industry has been passing through a turbulent transition phase.
Developments in automated, connected and electrified powertrain technologies are significantly altering the whole vehicle architecture, its capabilities and hence the consumer expectations. These along with evolving consumer preferences are shifting the competitive landscape in the automotive sector.However, most of these technologies, especially relating to automated cars and electric powertrain, still have challenges to overcome and are yet to fully address the significant barriers to consumer adoption and commercial viability. In this context, the Covid outbreak has only magnified and made the situation even more challenging for the sector that was already facing an environment that was quite volatile, uncertain, complex and ambiguous.
Even if a vaccine is invented and we all go back to ‘normal’ living, the impact of COVID-19 will still linger on and the ‘new normal’ will be different~
The outbreak has shown that in the face of a pandemic of such magnitude it is not just the supply chain but also the entire value chain that is vulnerable. It has significantly disrupted the labour market and has forced organizations to relook the traditional ways they organize their workplaces. Today, the world stands decisively altered and no one can ascertain the time required to overcome its impact on peoples’ lives and businesses around us.
Even if a vaccine is invented and we all go back to ‘normal’ living, the impact of COVID-19 will still linger on and the ‘new normal’ will be different. How will we bounce back? The answer lies in the way the universe ‘reboots’, ‘rethinks’, ‘reshapes’ and ‘reskills’ to turn these obstacles into opportunities.
‘Adapt, Relearn and Upskill’: The reboot may require organizations to reassess all that they have learnt and equipped themselves with. Approaching this unique situation in a positive way, they need to reinforce the clichéd, yet apt stance – ‘Necessity is the mother of all inventions’. Let us rewind a month or two. Who would have thought that the world would literally come to a standstill and still be productive?
Ever imagined the concept of ‘Work from Home’, which has been discussed for years, can become a way of life in such a short period? It seems to have now developed into a more productive and efficient alternative for many roles. Businesses have embraced the emerging challenges, by making ‘learning’ their mantra and acclimatizing themselves to advanced technologies, remote working while sustaining productivity with work-life balance. Case in point, the manufacturing and supply of essentials did not take a hit, proving that businesses managed to adapt to the challenging landscape.
Over the last few years, manufacturing in India was witnessing an increase in automation and many experts feel that this may be accelerated due to the pandemic. However, the technology-driven world filled with promises also brings with it a mosaic of challenges, the most important being jobs. Automation plays an important role in optimizing efficiency in certain processes and areas of work.
However, considering the country’s demographic dividend, low labour costs, depressed appetite for capital expenditure and the fact that the manufacturing sector is vital for employment generation in India, dependencies on manual labour will remain high. Needless to say, automation will still be prevalent, but the ongoing conditions may not hasten the pace at which it could have developed in the industry otherwise.
Due to dependency on supply chains, automotive manufacturing across the world came to a standstill as parts of its distributed ecosystem were impacted. Even if the industry does overcome the challenges of social distancing and sanitization at manufacturing units and boost production, the return to normal levels would still not be possible without a steady supply of parts. Hence, plans to mitigate the vulnerabilities arising due to the dependency on the geographically distributed supply chains need to be implemented quickly.
Covid-19 saw Original Equipment Manufacturers (OEMs) leading the way and working in close coordination with their suppliers and channel partners to limit the damage to their value chain. Although in the immediate future, consumer sentiments may be low, but in the mid to long run, things will change and it may give birth to various new opportunities including leasing of cars and not just selling them. This will allow carmakers to offer more options to the customers including customizations of their choice.
Another platform that needs to be developed as well as integrated is the digital or virtual medium. Gone are the days when ecommerce was mostly meant for fast moving consumer goods. Covid has taught businesses how to leverage digital space to sell a car by providing a 360-degree view of cars, online booking and financing options and doorstep delivery. Contactless buying and selling are no longer a vision for the future but a reality that is finding growing acceptance today.
Reshaping and rebuilding the auto industry in a post-COVID-19 world: COVID-19 will eventually pass, but the concepts of social distancing, contactless deliveries, disciplined and essential commuting are here to stay! Every crisis brings with it both challenges and opportunities. The Indian automobile industry was already going through a downturn when COVID-19 struck.
In the post-COVID world, we will all need to adapt, the processes followed hitherto will not suffice and changing paradigms and shift in consumer behaviour will compel players to revisit their strategies~
Economic distress, sharp drop in consumer sentiment and reduced demand due to Covid 19 only made matters worse. Nevertheless, the fundamentals of the Indian economy remain strong and there is a huge untapped potential demand for vehicles. Hence, given the resilience of the Indian industry along with supportive Government policies, the sector is bound to bounce back.
In my view, there will be two vital pivots to recovery and transformation – first being employee welfare along with changing job requirements and the second, being the immediate survival, sustenance and gradual recovery of organizations.
In the post-COVID world, we will all need to adapt, the processes followed hitherto will not suffice and changing paradigms and shift in consumer behaviour will compel players to revisit their strategies. In the short term, companies would have to conserve cash, enhance efficiencies, minimize waste and build an ecosystem that offers diversified and innovative services.
On the ground- level, it is essential to reshape the mindset. The need of the hour across the board is to accept and show a willingness to change. From the employees’ perspective, it is a given that the entire gamut of operations will be drastically different pre and post-COVID-19.
This is where upskilling becomes critical. Efforts should be made to educate the workforce to accept this reality and help them relearn, reboot and reskill to stay relevant. There is no ‘one-size-fits-all’ approach to this and it is going to be a long haul. Each organisation will have to introspect, reflect and find a solution that best fits its needs.
I would like to end with a quote from Anne Frank, which resonates in today’s situation – “I don’t think of all the misery, but of the beauty that still remains.” The world is in this ‘together’ and there are no more ‘isolated’ goals even if we are living in times of isolation ourselves! The human race has stood the test of times and overcome bigger calamities and I am certain that this too shall pass… We will emerge stronger and smarter!
(The author is Senior Vice President, Toyota Kirloskar Motor.)
(DISCLAIMER: The views expressed are solely of the author and ETAuto.com does not necessarily subscribe to it. ETAuto.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
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