CASE STUDIES

Devising a Response Framework for a Chinese Automotive Industry Client to Combat COVID-19 Challenges

Apr 13, 2020

The coronavirus outbreak has had a major impact on the Chinese automotive industry and has led to an unforeseen disruption of business operations. After the SARS outbreak in 2003, China had never witnessed such a huge impact until the coronavirus outbreak. As such, leading automotive companies in China have already begun implementing changes in business operations to ensure business continuity. While some others are still struggling to maintain productivity and retain employees. Implementing a sound business continuity plan is the key to survive through these tough times and emerge stronger.

This case study outlines how our market potential analysis helped a company in the Chinese automotive industry to create a threat-map dashboard, devise sound marketing strategy, and develop better digital capabilities amidst the coronavirus outbreak.

To rebound from the impact of coronavirus pandemic and rise stronger post-COVID-19 crisis, companies in the global automotive sector will need to address the immediate challenges that COVID-19 brings and create a detailed plan to ensure business continuity. Our market intelligence experts can help you to achieve these strategic objectives. Learn more here.

Business Challenge

The client is an automotive manufacturer and supplier based out of China.

As the Chinese automotive industry client had to make difficult choices such as closing production facilities and suspending discretionary spending owing to the fast-spreading COVID -19 pandemic, the company witnessed a decline in sales by 20%. Also, the client faced difficulties in addressing near-time cash management challenges and ensuring organizational resiliency.

The Chinese automotive industry client, therefore, wanted to prepare themselves to survive through these tough times and emerge stronger in the post- COVID -19 environment. In addition, as the number of individuals infected by the COVID -19 pandemic was decreasing in China, the client wanted to undertake a robust strategy to revive the supply chain, match demand and supply requirement, and protect their workforce to restart their production facilities. They also wanted to evaluate the market potential for their products and services in the post- COVID -19 environment and plan accordingly.

Other key objectives of the Chinese automotive industry client included:

  • To safeguard the supply chain operations by understanding supply chain risks and taking actions to address disruption
  • To implement robust marketing and sales strategies that suit the changing customer behavior
  • To manage cash outflows and improve liquidity
  • To identify internal and external risks and develop a range of scenarios to predict future outcomes
  • To increase local production and temporarily stop reliability on foreign imports

Wondering what to do next? Get in touch with us for more insights on COVID-19’s impact on consumers and businesses across various sectors.

market potential analysis followed a five-phased approach:

In the initial phase, the experts helped the Chinese automotive industry client to create a threat-map dashboard that provided them with real-time data. The threat-map dashboard also helped the client’s employees, suppliers, and customers to keep pace with the potential impact of COVID -19 and the company’s response.

In the second phase of the market potential analysis engagement, the experts helped the Chinese automotive industry client to develop contingency plans and implement safety protocols to tackle the coronavirus challenges.

In the third phase, our experts worked closely with the client’s direct suppliers to gain insights about their production capacity and potential issues. Also, the experts segmented the client’s key suppliers based on their production capacity. Besides, the experts helped the Chinese automotive industry client to identify the right set of suppliers to deal with product shortages.

The fourth phase involved devising a sound marketing strategy. After closely analyzing customer data, the experts recommended the client to consider supporting dealerships in providing demonstrations and test drives for customers at home.

The final phase of the market potential analysis involved conducting financial stress tests to examine the client’s current cash flow and balance sheets.

Business Outcome

With Infiniti’s help, the Chinese automotive industry client was able to devise a thoughtful approach to revive the supply chain, match volume to actual demand, and protect the workforce post- COVID -19 -crisis. The experts also helped the client to identify alternative suppliers in non-impacted regions of the world and improve visibility to supply chain risk.

By leveraging Infiniti’s market potential analysis, the client was able to adjust production needs as per the requirement and ensure employee safety. Also, by identifying and mitigating the risks of declining sales, the client was able to maintain financial health. Besides, the experts helped the client to understand potential supply chain risks and take actions to address disruption.

The creation of the threat-map dashboard helped the Chinese automotive industry client to encourage transparency and stay updated about the potential risks of the coronavirus outbreak. Also, by analyzing the potential for product shortages and possible revenue decreases, the experts helped the client to set new production priorities to manage demand-supply requirements.

The experts at Infiniti Research also helped the Chinese automotive industry client to identify local suppliers to support them at times of immediate requirements and product shortages. In addition to this, the client was able to understand how COVID-19 affected customer concerns, adjust marketing to focus on available models, develop better digital capabilities, and enable online sales channels.

We can help you to prepare for the rebound, gain agility, and ensure rapid response post- COVID -19 crisis. Request more info here.

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