Handbook for automotive industry business resumption  

The Deloitte China automotive team responded quickly at the beginning of February to address the impact of COVID-19, collaborating with Deloitte professionals from various service lines and publishing articles containing analysis and suggestions on how the automotive industry should react to the outbreak. The resulting handbook covers the entire automotive industry value chain, including cash flow, marketing and sales, human capital, supply chain, CSR and digital transformation. This article summarizes each chapter of the handbook. To read the detailed content, please download it from our webpage.

Mitigating risks while planning to resume work in the automotive industry

Having been severely impacted by the outbreak of COVID-19, the automobile industry, as an essential pillar of the domestic economy, reacted with determination. All players, including traditional OEMs, new entrant automakers, dealerships, suppliers and financial services providers have been rapidly evaluating the influence of the epidemic and taking action. Based on many years' experience in Risk Management, Deloitte summarizes in this article its latest insights on how to effectively response to risk through concern and support for people, finances and resources. With consumers' willingness to buy cars set to decline over the short-term and weakening after-sales demand, dealers resumption of business and inventory pressure will become much greater.

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Advices to automotive dealerships: How to mitigate short-term cash flow risk after resuming business

This article analyzes the cash flow challenge automotive dealers will face after COVID-19. It suggests automotive OEMs and dealers work together to address short-term cash flow risk after business resumption. Automakers should act to increase capital and reduce the burden on dealers. Dealers should mitigate pressure on cash flow through positive measures. In the long-term, China's automotive industry is undergoing a profound, consumer-centric transformation. Therefore, in addition to the above quick responses, manufacturers and dealers can take advantage of this opportunity to accelerate their transformations and turn the crisis into an opportunity to improve their ability to monitor pressure on cash flow and enhance their resistance

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Face the challenge and plan for the future, advices to auto industry on human capital planning during the epidemic

This article analyzes the overall impact of COVID-19 and solutions for human capital management in the automotive industry.
Work stoppages and temporary changes in employment will challenge personnel management for automakers. Meanwhile, development of the online new retail model and long distance work arising from COVID-19 will speed up the digitalization of automakers internal organizations. This article proposes a three-stage course of action for HR planning and response: resumption, development and long-term. In the resumption stage, reduce costs, increase efficiency and smoothly resume work and production; in the development stage, strengthen core competencies for steady improvements; and in the long term, promote business upgrading and transformation.

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Accelerating change in adversity, advices to auto industry on marketing and sales during the epidemic

This article assesses the impact on automotive industry marketing and sales from COVID-19. In the short-term, shocks have been amplified and production and sales plans disrupted. In the medium to long-term, the market outlook remains optimistic with accelerating industrial upgrading. For passenger car sales and marketing in the aftermath of the COVID-19 epidemic, Deloitte suggests OEMs adjust production, sales plans and marketing models based on their specific conditions and further empower dealer channels. In the medium to long term, OEMs should gradually move from conventional offline retail thinking and accelerate their transformations to new digital retail.

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Enhance toughness out of the trough, advices to auto industry on supply chain management

Based on the scope of COVID-19's impact on the automotive industry supply chain, this article proposes short-term and long-term suggestions for supply chain management. In the short term, OEMs should play the role of "chain masters" to strengthen visibility and coordination of upstream and downstream enterprises, resolve supply chain uncertainties, and cooperate to overcome difficulties. In the long term, OEMs should establish tenacious, flexible supply chains through capability orientation, technological empowerment and cooperation.

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Guarding against digital marketing system risks in the automotive industry

With advances in epidemic control and people returning to work, production and other operations of automotive enterprises and dealers are gradually returning to normal. As offline consumer activity plummets and online interaction surges, auto companies and dealers are rapidly ramping up their resources in digital marketing and introducing new online advertising methods and content. In this article, based on year of analysis of digital marketing risks, Deloitte provides deep insights into how to build closed-loop digital marketing systems in a post-epidemic ecosystem from the following perspectives: full-scale, multifaceted digital marketing channel planning; establishment and implementation of an efficient, unified, multi-channel management system; organic connection of digital marketing and offline sales; evaluation of channel efficiency and optimization of resource inputs.

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Acceleration of CSR and branding strategy in the automotive industry

During the epidemic, automotive companies and many other businesses have made substantial donations to relief efforts. According to incomplete statistics, more than 120 OEMs, parts suppliers, dealers, charging enterprises, logistics companies, and mobility companies in the auto industry contributed a combined RMB1.2 billion to fight the epidemic in less than two weeks. Automotive businesses have taken CSR actions in addition to making donations during the outbreak.

Deloitte believes the epidemic will accelerate the transformation of automotive company CSR strategies and practices to "Phase 2.0". In this phase, the fulfilment of CSR will become a way for enterprises to contribute to society, laying the foundations for sustainable brand development and repaying society as more effective organizers of social resources. The epidemic will prompt enterprises to emerge from their original strategic frameworks and innovate approaches to fulfilling CSR.

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Preliminary study on "no contact" marketing risk in the automotive industry

With the advancement of epidemic controls and the resumption of work, carmakers are drastically accelerating their digital marketing programs, and risks are starting to appear. In this article, based on years of experience in automotive risk management and digital marketing, Deloitte explores and discusses the following issues in "non-contact" marketing: 1) What impact has "non-contact" marketing had on the automobile industry?; 2) what are the risks of streaming, which is increasingly adopted in "non-contact" marketing, and how should automakers respond in the short term?; and 3) from a long-term perspective, what risks will "non-contact" marketing face and how should it be deployed?

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