Introduction
Gaskets and seals are used to make a connection between two components and used to fill the empty spaces between two surfaces which help to avoid leakage and wastage of fluids and gases. Gasket products are mainly used as static seals. Seals products are used between engine parts, pumps and shafts that rotate rather than those that are static. The gaskets and seals are specially designed depending on type of equipment and end-use surface.
The gaskets and seals industry has faced several crises due to the coronavirus that emerged from China and eventually spread all over the globe. All the regions have to take the strict action to deal with the increasing count of the coronavirus cases which has led to the lockdown in several regions, hence, resulting into less demand of the gaskets and seals parts. Moreover, China is the largest manufacturer of the gaskets and seals parts. The country has abundance of raw materials which are brought into application for production of finished goods. However, increasing effect of coronavirus in the country has affected the production, resulting in the lower demand of automotive, aerospace, marine and rail, electrical and other many industries.
At the same time, the demand for other goods that are not used on a more frequent basis has decreased as a result of lock-down in the various regions. For the product ranges sold by manufacturers / dealers, the effect of COVID-19 on the automotive industry can be seen.
IMPACT OF COVID-19 ON AUTOMOTIVE INDUSTRY
The demand of automobiles has gone down drastically which has resulted in lower demand of auto parts such as gaskets and seals and other rubber based components as well. India and China are among the top manufacturers of gaskets and seals and have witnessed depriving demand and thus had to cut down the manufacturing massively.
COVID-19 has impacted the supply chain the most as due to the lock down in the several countries. The import and export from different nations become difficult and also the demand has reduced which has impacted the demand of the automotive materials. Several manufacturing activities have gone on hold as the market has very less demand of automotive materials.
Manufacturers have faced several problems in the automotive industry due to the disturbance in the supply chain of the automotive parts due to the COVID-19. The demand of the automotive parts has fallen in the industries due to the lower production of the finished goods which has resulted in fall in the price of the automotive items in the global market. The export and import of the electronic parts in different countries have reduced due to the pandemic situation created by COVID-19.
In December 2019, the appearance of coronavirus in China and gradual expansion of the epidemic drastically brought down the demand of the automotive parts. The prices of automotive materials have fallen to negative because of the lower demand in the market and less storage availability for automotive materials.
As China, India and the U.S. are the leading producers which have faced many problems due to lower demand of the automotive materials in the developing nations. In the pandemic situation, import and export and flow of goods have become very difficult due to which the prices of the automotive parts have fallen.
|
|
Vehicle Sales
|
|
|
Country/Region
|
2019 Million Units
|
2020 Estimated Million Units
|
% Change
|
|
China
|
25.7
|
21.9
|
-14.79%
|
|
U.S.
|
17.6
|
13.4
|
-23.86%
|
|
Europe
|
18.3
|
13.6
|
-25.68%
|
|
Rest of World
|
28.4
|
23.0
|
-19.01%
|
|
Total
|
90.0
|
71.9
|
-20.11%
|
Several companies which are engaged in the manufacturing of gaskets and seals have faced several challenges towards the sale of seals products due to shutdowns in manufacturing of industries such as in aerospace industry, oil and gas industry and automotive industry which has led to lower demand of gaskets and seals in the market.
Price Impact
Due to COVID-19, the price of gaskets and seals material has been adversely affected due to reduction in the demand of aerospace, oil and gas and automotive equipment and engine products in the market. Other nations or countries are not entering into import and export of raw material and finished goods due to which the demand of the market has decreased. With lowering the demand in the market, the price of gaskets and seals products have declined and manufacturers have to face huge losses.
COMPANIES STRATEGIC INITIATIVES DURING COVID-19
- In July 2020, BASF SE has manufactured and also donated 4 metric tons of Ultramid B24 N-polymers to Ahmedabad Textile Industry’s Research Association (ATIRA) which helps to produce personal protective equipment (PPE) for the Indian medical fraternity. These steps taken by the BASF SE also help the Indian government to fight against COVID-19 situation.
- In July 2020, BASF SE donated Rs. 31.20 million to Indian government. The fund was very helpful for Indian people to fight against the novel coronavirus. The donation has helped to create a good image in Indian market.
- In June 2020, Corning Incorporated has supported the Indian government in COVID-19 situation. The company donated pulse oximeters, infrared thermometers and PPE kits for public health and also 1 lakh units for vitamin C tablets for 5,000 policemen in Chakan, Pune.
By adopting different strategies such as growing manufacturing efficiency, new product launches and product distribution, the manufacturers seeks to achieve optimal market development. The exponential growth of industrial gaskets and seals sectors such as electrical distributions is projected to provide attractive prospects for key market players. This is anticipated that variables such as the locations for distribution and sales can help boost the overall position of the business. Small domestic players and especially emerging players in developed countries are likely to obtain opportunities to position themselves in the marketplace.
Conclusion
COVID-19 has crashed the gaskets and seals market as the demand of the automotive industry has declined due to which the price has also decreased. Even the price of the gaskets and seals during the lockdown has gone in negative also. The demand from different regions has reduced due to long term halt in the production. COVID-19 has impacted the connection between different regions as import and export have stopped. Several manufacturers have also closed the display industry due to heavy losses.
With the increasing demand of the high quality safety engines in the developing nations and also with the increase in the demand of the automotive, the demand of the gaskets and seals is likely to increase in the market. Import and export of raw material and finished product of metallic and non-metallic products will help to boost the market in near future. The government authorities are also taking several steps towards the growth of the gaskets and seals products.
Today, the spread of the novel coronavirus has triggered significant market damage across the globe. Most of the businesses have stopped immediately and the effect on oil and gas industry of the coronavirus pandemic is not yet clear. The towns are closed down and social distancing has become a modern norm.
Several manufacturers closed the factory due to heavy losses. The companies are making the strategic action to increase the demand of the gaskets and seals in the market aiming to increase the price and revenue. Government is also helping the manufacturers by making policies which help manufacturers to maintain stability.
