Because the majority of jobs in the automotive sector are closely connected to manufacturing, there has been a significant impact on production this year.
Manufacturing has faced major challenges since the outbreak of the coronavirus pandemic due the difficulties of creating a virus-safe workplace. This has resulted in widespread plant closures. With factories closed, employees are unable to work, resulting in a domino effect across the entire sector.
Compounding the problem are supply chain issues, as many manufacturers are greatly reliant on materials from overseas suppliers. This resulted in early losses of as much as 86% in the worst cases, forcing businesses in the manufacturing industry to adopt new strategies.
Automakers in North America and Europe, meanwhile, had to shut down plants. Though the automotive sector is much larger than vehicle production, plant shutdowns have had a ripple effect throughout the industry. In a survey of our clients, respondents in the automotive sector reported overall losses of 55% during the first weeks of the pandemic.
The key for companies in the automotive industry has been to remain responsive and agile. Doing so has positioned them to adapt and recovery quickly. For instance, enabling early invoice payments to suppliers operating in heavily affected regions permits the suppliers to maintain their operations.
As with virtually every other consumer and business market, the pandemic has accelerated the automotive sector’s shift toward digital commerce. Mobile auto parts sales had already reached $7.5 billion in 2019, transforming an industry governed by technical expertise to an experience economy whose customers select not only the parts they need, but the companies they trust with their business.
In spite of this year’s challenges, the global automotive industry is on track to break $1 trillion by 2022 as consumers, dealers and hobbyists alike seek out greater product availability and selection online, driven by optimized buyer experiences.
Jenna Lesar, Marketing Director at Detroit Speed, says, “For people to trust us to build a car, to put their faith in our suspension to drive their family to the movies or go racing, that customer belief is really important… the better the experience, the more the customer will trust your business, product, and order process.”
For more information on growing an automotive business online, be sure to look at our resources for the automotive industry.