COVID-19 Impact on the Automotive Labels in Automotive Industry

COVID-19 Impact on the Automotive Labels in Automotive Industry

  • Automotive
  • Nov 19, 2020

COVID-19 Impact on the Automotive Labels in Automotive Industry

Overview

The COVID-19 a pandemic disease has made all countries standstill for almost two quarters since November 2019, outbreak from China to all the countries worldwide. It affected the biological balance, world & country-wise economy, automotive sector, industrial sector and other owing to which lockdowns were imposed for controlling the widespread of the viral disease. To prevent the rapid spread of disease spread lockdown is yet the better solution observed in many countries but it has a negative impact on the economy. One of the most common safety precautions imposed by all the countries is the use of sanitizers, face masks to prevent viruses entering the body and lockdown all over the country apart from daily needs services such as food items, medicines and grocery.

Introduction of lockdown has resulted in temporarily closing of all operations for all sectors till unlock procedure is started by respective governments. COVID–19 pandemic has not only impacted health or medical concerns but also economical situations are facing consequences of this pandemic. These lockdown implementations resulted in heavy impact on every industry, majority of the businesses incurred losses. The pandemic situation dig a deep hole in customer’s financial incomes as companies are nearing recession, termination of employment, lay off and others problem are rising in the global market. The automotive industry experienced strong hit in the first couple of quarter of the 2020 as the all showrooms, supply chain, manufacturing facilities and other supporting offices, warehouse and transportation has been shut down.

Automotive labels market markets are facing collateral damage as that of other automotive industries. Simultaneously, automotive labels market technology and the industry is facing a serious decline in revenue generation. This restricted situation created a major impact on the customer’s financial status as people are now focusing on completing the needs primarily rather than going for wants and desires such as buying a car that has the automotive labels market. The car has almost become an important part of the person’s life and the automotive industry has witnessed a steep decline in the sale or zero sales at the end of the first quarter. Market leading players such as Toyota, Ford, Volkswagen and others are facing a reduction in revenue compared to previous years.

For instance:

According to Federation of Automobile Dealers Association, there is 36.3% decline in sales of automobile sector combining of two-wheeler, three-wheeler, commercial vehicles, passenger vehicles and tractors in July 2020.

However, growth for automotive labels market is paused but not stopped; when automotive industry operates at normal level it is expected that automotive labels market will achieve higher growth rate than overall automotive industry. The tractor has shown the rise in sales because of lockdown many businesses got hampered and hence people diverted towards agriculture which has proven the economy driving sector from many years. Due to appropriate weather report and favourable climatic condition, people who have lost jobs in the pandemic has opted for agriculture.

Impact on Demand of Automotive Labels Market:

Automotive label is the labelling or naming any part or vehicle. The labelling is used for part description such as part no., chasis no., model no., instructions of use and many other purposes. Due to COVID-19 outbreak and the lockdown effect has halted the manufacturing units and sudden decline in the automotive market. This has resulted in the decline of automotive manufacturing which had adverse effect on labels used in automotive. As the demand for unnecessary goods and services had declined, the automotive labels market had also decline.

The raw materials used in manufacturing of labels such as polyvinyl chloride, polyethylene which harms the environment. These chemical materials affect the environment and government has imposed many restrictions on the use of such materials. The decline in the income of the people has adversely affected the demand of the automobile which has resulted in demand of automobile labels market.

Covid-19 Impact On The Automotive Labels In Automotive IndustryCOVID-19 pandemic impacted negatively on demand for automotive market; which has witnessed a serious drought in first and partially second quarter of the year 2020 during Covid – 19 pandemic; which has depicted the consequences in automotive labels reduction which is worst in history since its inventions. However, with loosening in rules and regulations of lockdowns and resumption of operations in all the sectors; demand for automotive labels market is slowly gaining ace as manufacturing plants have started manufacturing the vehicles on small scale with following social distancing norms instructed by government bodies.

Impact on Supply Chain of Automotive Labels Market:

This pandemic has adversely affected the supply of automobile and supply chain network as well. This has resulted the shutdown of their plants and manufacturing units till unlock phase begins. This has resulted in de-growth of the automobile makers in India and these significant delays in the logistics chain has been stretched extremely thin.

Below table statistics indicate that during September 2020 and September 2019 in India, Maruti Suzuki had managed to grow on sales by 33.9 percent in the month of September. In the month of August, when government had fully eased up restrictions on businesses countrywide, sales again picked up for vehicles and demand is increasing steeply. Same situation can be observed and anticipated worldwide as duration and timing for lockdowns is different due to non-uniform spread of corona virus.

Steps Taken by Manufacturers during COVID-19 Situations:

During lockdown and restricted course of time, most manufacturing units and assembly lines remained closed due to lockdown imposed by the government and however, with limited operating staff and assurance of following social distancing norms manufacturing plants have got permission to resume their manufacturing of automobiles. Manufacturers are investing more in resources in research and development which can be tried out and implemented in the latest products. Also; manufacturers are not opting for any undue risk of manufacturing more than demand and are cautious of further market situations as conditions are unpredictable and vulnerable.

Many manufacturing industries such Hyundai Motors India Ltd had announced that the CSR wing of automaker will provide consumables to hospitals for the treatment of patients affected by the corona virus. The Make in India initiative taken by Government of India has affected the automotive plants to setup in India from China. This initiative is followed by many manufacturing companies.

Conclusion:

From the overview, impact on demand and steps taken by manufacturers it can be inferred that initially, the automotive labels market witnessed a steep decline as automotive sales is decreased due to uncontrollable environmental factors like lockdown; gradually demand is increasing for automobiles as governments have started opening various sectors to avoid recession like circumstances. It can be anticipated that after COVID-19 pandemic ends growth for the automotive labels market industry will not slump as following social distancing norms and sanitizing the workplace remains the best prevention as of now to avoid the spread of such a deadly virus. Except for the supply chain, other operations are back on track; the incoming quarter situation is unpredictable but full-fledged supply chain flow is expected to take place.

The automotive labels market is expected to rise steeply even after the pandemic gets over as demand for automobiles is expected to increase. Due to an increase in the community transfer of the virus, people are buying cars for their travelling from one destination to another as this will avoid travelling in public transport which will ultimately avoid the spread of the virus. “In a post COVID-19 world, we do expect continued adherence to social distancing norms. Apart from demand-side variability, the auto sector will continue to face challenges related to non-availability of labor, concerns on health and safety management on the shop-floor”, said Vinay Raghunath who is an automotive sector expert.

According to Autocar, Indian Sports Bike maker BAJAJ had announced a relief package of Rs 100 crore which will be used to upgrade healthcare facilities.

Indian automaker Mahindra & Mahindra had announced to manufacture face shield for the doctors and all the employees working sleeplessly in the COVID centers. The company had also manufactures ventilators for the hospitals who were out of there facilities.

Above narratives from industry giants, it can be anticipated that market for the automotive labels market is looking optimistic in terms of demand and is touted to grow at a higher growth rate when the supply chain operates at a full-fledged level. Five years down the line from now automotive labels market industry looks bright and can be perceived as a good opportunity to invest in along with an increase in demand for automobiles.

 

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