COVID-19 Impact on the Automotive Logistics in Semiconductors and Electronics Industry
COVID-19 is a pandemic disease that has triggered a severe worldwide epidemic, beginning in China and almost every region. Almost all, including the global economy, human life, manufacturing sector, automotive sector and others has a significant effect as a consequence of lowering demand and consumption rates. The inaccessibility of the vaccine to cure or prevent the spread of the disease is a big factor why the lockdown was introduced in preparation and to reduce the spread of COVID-19. Lockdown is too far away to monitor the spread of the disease and is known to be the superior arrangement watched within the different nations but it also has an adverse impact on the economy. As all facilities are closed, which is a reason for the sluggish growth of the sector, the lockdown has affected the manufacturing industry, distribution industry, operating plants, ports and other locations.
Logistics market have become complex in the global reach. According to a report, more than 75% of the automotive logistics is linked to the country China for components and raw materials for the vehicle or finished vehicle, directly or indirectly. And due to COVID-19 pandemic, original equipment manufacturers have realized that where the linkage of supply chain has been adversely disrupted for automotive industry. This pandemic has severely affected the demand and supply of the automotive parts at a global level and for uncertain time. There has become shortage of materials for the production of vehicles due to the disruption of automotive logistics in all over the world. Although, permission provided by the government to start transportation goods and raw materials from one nation to other with certain safety measures will surely help the automotive logistics industry to get back on track slowly. The first shock that world felt was when China’s manufacturing units came to standstill as COVID-19 exploded started from the vitally important city of China namely Wuhan. Due to stoppage of all automotive manufacturing and travel restrictions in all over the world, many logistics company were facing severe risks of getting bankrupt. Many OEMs have taken important decisions to overcome from the serious crisis.
For instance,
• The companies such as Ford and GM have suspended their automobile manufacturing units in the U.S. for the production of medical devices.
• Nissan had suspended the U.K. based manufacturing operations of automotive due to the declined demand and supply chain disruption.
• Daimler had also suspended their European production plant due to disruption of automotive logistics services.
• Honda has closed its four vehicle plants in the U.S. owing to reduction of market and disruption of logistics service.
Read in detail...