Automotive Industry Report: Pandemic Effects and Survival Factors

This report examines the impact of the COVID-19 pandemic on the global automotive industry, detailing how government-imposed trade restrictions and economic downturns led to lower car production due to supply chain disruptions and chip shortages. It highlights how companies like Bentley faced workforce reductions and debt increases. The report further explores the role of megatrends such as digitalization, sustainability, big data, and artificial intelligence in the industry's survival and success, emphasizing innovation, performance enhancements, safety improvements, green manufacturing, and quality control. The analysis concludes that adapting to these trends is crucial for the automotive industry to overcome pandemic-related challenges and achieve sustainable growth. Desklib provides a platform for students to access similar solved assignments and study resources.

The Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
The impact of pandemic on the Automotive industry............................................................3
Survival and success factors of automotive industry with consideration to Megatrends.......6
CONCLUSION................................................................................................................................7
References........................................................................................................................................9

INTRODUCTION
The Global business environment refers to the different environment factors that implies
in the several sovereign countries. All of the industries that operate in that environment faces
such forces in their operations. It impacts the organisation decision making as well as reflect on
their operational activity. In order to perform in such environment companies solely focuses on
these exogenous factors in order to use their resources significantly and efficiently in the global
market. On behalf of this scenario the auto-motive industry will be discussed in this detailed
report (Podstavkova,, 2020).
In pandemic several industries has faced the global downturn in their operations due to
several elimination of interconnection of global economies. Due to pandemic international
boundaries were closed down by the governments in order to safeguard its employee by infected
virus. In relation to this, the impact of pandemic on Automotive industry will be discuss in the
mentioned report as well as a detailed success factors will be highlight in consideration to the
mega-trend in the detailed report.
MAIN BODY
The impact of pandemic on the Automotive industry
The COVID-19 has enforced the governments of countries in order to stop the global
trades between the countries. In Pandemic the economic growth of countries were encountered
badly due to complete pause in economic activities. The low per capita income and downturn in
economic activities shows their effects on several industries so on the automotive industry. Due
to trade barriers industries were not able to perform their functions deliberately in the market. To
form any vehicle several auto-parts and technologies were needed which companies generally
import through several countries. But in COVID-19 due to banned on international activities
companies were not able to imports such parts in relation to manufacture the vehicle that raised
the issue of resources in industry functions. Below are the elaboration of factors that influenced
due to Pandemic in the economy.
Lower Car production- In pandemic all the automotive industries has faced the issues in
producing the cars. The main reason of arising such scenarios is due to impact on the supply
chain management. The supply chain management were the One of the most impacted channel I
pandemic due to restrictions in the global business environment. Companies like jaguar, Bentley

and BMW faced the shortage of auto parts in relation to perform their functions smoothly.
Majorly china is the hub of auto parts which exports these parts to several automotive industries
globally. But due to major downturn in economic conditions all these trades were shattered by
governments (Surplice, 2020).
In relations to this the lower demand of Cars in pandemic was the another reason that majorly
affected the complete functions the mentioned industries badly. Moreover after the pandemic
government implemented the guidelines in order to create a safe and secure working
environment in the workplace. Hence due to such scenario automotive industry invested heavily
in order to safeguard their employees as well for spend their investment to create the safe
environment channels.
Chip shortage- According to the BBC, 2022. In the global automotive market companies faces
the shortage of semi conductor chips that used in manufacturing the premium cars. Hence due to
shortage of such chips in the market luxurious brands were not able to fulfil the market demand
after the restrictions of pandemic. This chip plays a major in car component. It is used in break
sensor to power steering in the cars. Due to this manufacturer were forced to lower down their
production. In manufacturing a car numbers of chips were required. Hence the shortage of chips
created the hectic environment in the automotive industry (November car production hits lowest
level since 1984. 2021).
cutting jobs due to lower demand- According to the Michael Wayland, 2020. due to lower
demand for Bentley cars the mentioned company reduced their workforce in order to reduce their
operational activity cost. Bentley eliminate the 1000 from its operations which is merely about
the quarter of its complete workforce (Block, Gellrich, and Russ, 2021). All of these scenario has
generated due to economic downturn and ineffective activities. Due to pandemic company also
restructured its cost and investment structure in order to concur such losses that occurred due to
pandemic. The respective company also delayed its future plan and strategies which was created
by them to get the competitive advantage as well for the sustainable approaches in their
operations . Beyond 100 in which they planned to strengthen the company operations for over
100 years. They were planned to develop their models into electric and hybrid car models.
These functions were required the major chunk of investment. But due to unexpected COVID-19
companies faced huge losses and scarcity of resource that delayed their plan
(Bentley and Aston martin cutting jobs a coronavirus derails luxury car market. 2020).

High debts on company- all the automotive industry faces the downturn in their operations. All
the operations were completely closed in COVID-19. Due to such activity in the global
environment companies incurred with the huge losses in their operations. The profitability of
suppliers were dropped down drastically due to closure of intentional boundaries. Globally
several stores were closed because of lack of funds in operating the functions. Companies of
automotive industry already faced the high debts on their operations as well as due to lack of
new funding in the industry company faces difficulty in order to rebound their functions again
(Smith, and Pesce, 2021).
Sustainability
Currently vehicles are producing the carbon emulsion in the environment. These carbon
emulsion affecting the environment badly as well as causing the global warming. Hence, to
reduce such poisonous gases several automotive companies are working in order to transform
their business functions. They are focusing in order to create the sustainable approaches in their
functions. Companies like Bentley planted the several solar panels on their factory outlets in
order to reduces their energy uses. They also working on launching the electric vehicle in the
market in order to create the sustainable practices in the business environment. Several countries
re facing the problem of bad air quality and environmental issues in their economy. Hence,
through the electrifying cars these factors can be eliminate easily from the environment. In
relation to this electric vehicles also provide an edge to the companies in order to eliminate the
risk of lawsuits and other government policies of countries due to their sustainable approach.
Therefore, it plays a major role in order to enhance the business operations of automotive
industry by the adoption of such sustainable approach in their operations
(Tian, and et. Al., 2021).
Autonomous driving
Nowadays the technology is evaluating rapidly in the automotive industry. Companies
launched the self driving vehicles in the market in order to decrease the need of human as well as
to ease the transportation of people by decrease the risk of accidents. Many automotive
companies working on such technology in order to imply such effective technology in their cars.
These cars were equipped with advanced high technologies that indentified the obstacles comes
under the route. Hence, these self auto cars are attracting the number of customers towards them.

Because it’s eliminate the human negligence with their inbuilt programming functions as well as
reduces the downtime (Attinasi, and et. Al., 2021).
Survival and success factors of automotive industry with consideration to Megatrends
Megatrends are basically meant changes in the environment and surroundings on a large global
scale. These megatrends involve many industries and results in global impact with a rapid
changing environment. The primary and foremost forces causing megatrends are
globalisation, technology, demographics, and environment (T. and Weirauch, 2018). Major of
these megatrends are as follows:
 Digitalisation: This megatrend is meant by conversion of information and knowledge
into digital format for better and efficient understanding and completion of task.
Moreover, Digitalisation has resulted in content or media by the generation of number
series that determines a set of points. This megatrend is regulated in organisations in
order to enable automation, collection and analysis of data, increasing data quality, etc.
 Sustainability: Sustainability is one of the major megatrends which are regulated as
positive efforts in saving out planet and natural resources. This megatrend suggests
minimizing factors that impact the environment and resources negatively. For instance, it
recommends potential use of resources in carrying out various operations and minimizing
waste driven from these operations or activities.
 Big Data: Big data is a scientific as well as systematic approach towards gathering large
and huge data/information and analysis of the acquired information. It includes large and
huge size databases which are complex to be worked upon with traditional system of
data-processing. Big data engages these data into analysis and represents the analysed
reports for better understanding of user.
 Artificial Intelligence: AI is one of the highest rated technologies ever discovered which
is determined as virtual human intelligence. For instance, computers or robots that are
controlled by computers indulged in performing tasks that are usually carried out by
humans (Krause, 2020).
Factors of automotive Industry for survival and success
 Innovation: The changing dynamic environment requires consistency in betterment for
survival and growth of business in the market. Innovation in automotive industry into
existing products with the use latest technology has allowed the industry in survival in the

long run and further success. Innovation in Automotive industry allows company to
provide customers with latest automobiles in the market (Brenner, and Herrmann, 2018).
 Performance: Performance of products and services has been constantly enhancing
through various changes in technology and adaptation of latest technology. Enhanced
performance of automotive industry attracts additional customers for company’s offering
and will facilitate in survival and success of the industry. Furthermore, Automobiles now
provide with better and efficient comfortable experiences and enhanced performance in
order to increase overall sales.
 Safety Improvements: Customers are more concerned with safety features of
automobiles with awareness of these megatrends. Automotive industry is focusing way
more than earlier on their products regarding the safety features and measures. This
positive aspect has attracted customers towards better and safe vehicles produced in the
automotive industry. Furthermore, this factor has become success and survival factor for
automotive industry with reference to megatrends.
 Green manufacturing: Green manufacturing is basically meant by carrying out
production or manufacturing process with minimising negative impacts on the global
environment. In addition to that, this results in maintaining environmental sustainability
and natural resources. This factor also leads in optimum utilisation of resources used in
manufacturing procedure and providing additional value to environment by minimising
waste and eliminating improper utilisation of resources (Möller, and Haas, 2019).
 Quality: Megatrends are basically raised and spread for ensuring efficient quality in
products and services offered by automotive industry. Companies and organisations in
automotive industry are initiating immense efforts in order to enhance quality of their
offering in the consumer market for increasing sales. Therefore, constant improvisation in
quality has become a survival and success factor for automotive industry.
CONCLUSION
From the analysis of above report it is clearly stated that due to pandemic global economy
has faced the major downturn in their functions. Several industries faced the issues in regard to
perform their functions in the operating market so on the automotive industry. As mentioned in
above report companies in the automotive industry faced the scarcity of resources such as
semiconductor chips that plays a major role in manufacturing the vehicle as well as due to lower

demand of the vehicles declined their production line. Further, several megatrends were specified
such as autonomous driving and sustainability through which companies upgrading their
business operations as well as attract the number of customers in the global market

References
Books and Journals
Podstavkova, M.I., 2020. Coronavirus pandemic Impact on the European automotive industry
growth under its structural transformation. Russian Foreign Economic Journal, (5), pp.101-109.
Surplice, P., 2020. The future of Automotive–will it ever recover?.
Block, A., Gellrich, M. and Russ, C., 2021. Effects of the COVID-19 pandemic on SME
sustainability: case study of car dealerships in Switzerland. European Journal of Applied
Business and Management, 7(1), pp.58-83.
Tian, X., An, C., Chen, Z. and Tian, Z., 2021. Assessing the impact of COVID-19 pandemic on
urban transportation and air quality in Canada. Science of the Total Environment, 765, p.144270.
Attinasi, M.G., De Stefani, R., Frohm, E., Gunnella, V., Koester, G., Tóth, M. and Melemenidis,
A., 2021. The semiconductor shortage and its implication for euro area trade, production and
prices. Economic Bulletin Boxes, 4.
Smith, M.S. and Pesce, M., 2021. Gizmo: Macro & Micro. IEEE Spectrum, 58(12), pp.20-21.
Bormann, R., Fink, P., Holzapfel, H., Rammler, S., Sauter-Servaes, T., Tiemann, H., Waschke,
T. and Weirauch, B., 2018. The future of the German automotive industry: transformation by
disaster or by design?.
Brenner, W. and Herrmann, A., 2018. An overview of technology, benefits and impact of
automated and autonomous driving on the automotive industry. Digital marketplaces unleashed,
pp.427-442.
Krause, M., 2020. Technologies and Innovations for the Plastics Industry: Polymer 2030.
In Innovative Technologies for Market Leadership (pp. 233-243). Springer, Cham.
Möller, D.P. and Haas, R.E., 2019. Guide to Automotive Connectivity and Cybersecurity:
Trends, Technologies, Innovations and Applications. Springer.
Online
November car production hits lowest level since 1984. 2021. [Online] Available at:
<https://www.bbc.com/news/business-59761286>
Bentley and Aston martin cutting jobs a coronavirus derails luxury car market. 2020. [Onilne]
Available at : <https://www.cnbc.com/2020/06/05/bentley-aston-martin-cutting-jobs-as-
coronavirus-derails-luxury-sales.html>