Auto Industry Needs Low-Cost, Localization Products to Stabilize Business After Covid-19: Report

MUMBAI: The national automaker will have adopted several measures, such as low-cost products, greater localization and to stabilize businesses in the post-COVID-19 situation, according to a report.

Permanence of the workforce at the plant, improved health and safety practices and investment in digitization are some of the steps the industry will need to take once the closure is lifted, he added.

(NRI) Consulting&solutionsindiainitsreportalsolaunchedstimuluspackagestocatalyzetherestartoftheindustry.

theautoindustryaccountsforalmost50percentofindia'sindustrialgdpandisoneofthelargestemployers,boththroughdirectandindirectemployment.

hewasalreadyfacingfallingdemandforoverayearandahalfbeforethenovelhitworld,andlatertheglobaleconomy.

asthecoronavirusiswreakinghavocacrosstheworldandposingoneofthebiggestchallengestohumanity,thedevastatingeffectofthiscrisisoneconomiesisverymuchvisible,withtheimpactonlyexpectedtoincreaseinthecomingmonths,nriindiasaidinitsreport.

productdevelopment,procurement,manufacturing,finance,logistics,sales,marketing,andafter-salesaresomeofthechallengesfacedateachstageofthevaluechain,dependingonthecontextandconfigurationofeachstagefordifferentactors,accordingtothereport.

herecommendedthatproductdevelopmentmeasuresaimedatsignificantlycuttingthecostofmarketingnewproductsandchangingcustomerneeds,forexample,adoptingchangesincosmeticdesigntofacilitatesurfacedisinfection,willbekeyfactors,alongwithacontinuousfocusonexistingcleaning.mobilitysolutionstostabilizebusinessinthecovid-19phase.pushingforlocalizationandensuringcontinuityofsupplyalongwithacriticalreviewofinventorypoliciesbasedonsupplyproblems,on-siteworktenure,besthealthandsafetypracticesandahigherdegreeofautomationalongwithinvestmentindigitizationarethefewkeysuggestionsinthereport.

thereportalsocalledforconsistencyingovernmentpoliciesrelatedtosafetyandemissionstoavoidunduestressandthecontinuityofbusinessplansalongwithstimuluspackagestocatalyzetherestartoftheindustry.

theevolutionofthecharacteristicsoftheproductbasedontheemergingneedsofhygieneanddisinfection,localization,greaterdegreeofautomation,digitizationandinnovationsinfinancing,andasetofeconomicstimulusbythegovernmentarethehourlyneedsthatwillhelpustoovercomethiscrisis,saidashimsharma,partnerandgroupleaderforbusinessperformanceimprovement(carsandlogistics)andsolutions.

"This crisis brings to the fore an opportunity for Indian auto part makers to increase their participation in the global value chain by becoming an alternative to China in the changing geopolitical world order and for this in some cases, a technology acquisition maybe imperative," the report said.

Given the financial distress across the world , the more financially sound players in the country could also acquire firms and technologies in this period and that would help position them as effective alternatives while also furthering the true 'Make in India" spirit, it added.

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