For the auto industry, figuring out how to carry on during the the building and changing chaos of the coronavirus pandemic is a little like trying to solve a jigsaw puzzle where the pieces suddenly don’t fit and the picture keeps changing.
At a trio of webinars over the past two days, dealers, suppliers and industry analysts offered up thoughts, solutions and predictions that seem to all add up to what Cox Automotive ORLY Director of Automotive Relations Michelle Krebs stated at one of those webinars, “it changes us fundamentally.” Today In: Transportation
Carla Bailo, President of the Center for Automotive Research (CAR) in Ann Arbor, Mich., put it in martial terms declaring, “There’s really a war. There’s a war on this virus. It’s a war that we haven’t fought and it’s a war on our own shores and with our neighbors. The rallying together we’ve seen not only from our industry from a number of industries, a number of foundations, a number of persons in our community has really been amazing.”
Indeed, several automakers that quickly shut down vehicle production for the safety of their workers, suddenly jumped into the battle by assisting or started producing ventilators and face masks to support beleaguered health care providers desperately short of supplies.
Bailo pointed out that so far 12 automakers and 9 other companies have stepped up to support the health care industry.
They couldn’t do it alone, calling in relationship chips with their vast supplier network, as Julie Fream, CEO of the Original Equipment Suppliers Association pointed out during the CAR webinar saying, “Whether it’s the purchasing power ability organizations have, whether it’s the ability to manufacture in large quantities, improve efficiency on some of the existing production lines that perhaps haven’t had that demand in the past and now trying to step up and do as much as they can.”
Colin Dhillon, Chief Technical Officer at the Automotive Parts Manufacturing Association of Canada pointed out that medical supply companies aren’t nearly equipped to keep up with the huge volume of demand for their products, and that’s where the auto industry becomes vital.
“The challenge is a lot of these medical companies that manufacture things like ventilators, whether they’re transport types or ICU types, their annual volumes are a fraction of what they need, so a company that might sell 3,000 ICU type ventilators..that’s a large volume order,” said Dhillon.
Those higher volumes of locally sourced supplies could help drive down prices that spiked along with demand.
“The cost of an N95 mask five months ago was 70 cents U.S.,” said Dhillon. “I think we’re paying over seven dollars a mask, because certain countries with restrictions are charging it.”
What he called a “contingency group” of several automotive suppliers in Canada, along with manufacturers outside the auto industry, have teamed up to commit to producing a large volumes of face masks.
Of course even the spirit of cooperation has the potential to generate a modicum of suspicion according to Dhillon who said, “it’s safe to say when we talk to a lot of these medical companies to help them ramp up their volumes one of the concerns was what’s gonna stop you from staying in this and being a competitor? To which you have to answer that, it’s entirely up to every individual company but only share the IP (intellectual property) you feel you can share.”
For dealers, the mandates for social distancing mean, for intents and purposes, zero showroom traffic, so they’ve had to learn to develop virtual showrooms and carry on business online.
During a webinar organized by Reputation.com, dealers learned they need to step up their social media presence, become adept at managing tools such as GoogleMyBusiness and be forthcoming to consumers about what services they can provide.
“The digital retailing experience should allow shoppers to build a deal online that reflects a realistic buying scenario,” advised Ali Fawaz, Head of Global Automotive Strategy at Reputation.com. “Allow consumers to complete as much of the process as they want to. Broadcast this.”
Julie Fitzpatrick, business development manager at Crest Lincoln in Woodbridge, Conn., attested to the types of changes made at her dealership explaining, ““We had to really make that pivot to being a remote sales dealership but also honoring and pushing our service department as an essential business. We have been really promoting at home test drives, and pickup and delivery.”
Cox Automotive’s Michelle Krebs, during the Society of Automotive Analysts (SAA) and Automotive Press Association (APA) webinar said, those types of moves were inevitable, and perhaps, untouchable in the future, saying, “They’re doing what customers have been demanding all these years. The ones who are doing best have already adopted online sales or quickly adopted those tools and shifted to pickup and delivery for sales and service. We think that will be the way of doing business going forward.”
Going forward. That’s the issue. When can that happen, and when we get there, what will it look like. The consensus is that it will look very different for longer than we’d like.
As Jeff Schuster,
President Americas Operation and Global Vehicle Forecasts at LMC Automotive predicted during the SAA/APA session, “We’re probably not done with this. The virus isn’t just going away, so we’re gonna have an element of it where it has a hold on, I think, our psyche, on buyers’ behavior, as well as the industry and manufacturing.”
Adopted from https://www.forbes.com/sites/edgarsten/2020/04/03/grappling-with-the-auto-industrys-new-world-during-covid-19/#4a9b835a401d