Auto Hub https://autohub.property260.com Selling Dreams Wed, 13 May 2020 18:28:21 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.26 How is Covid-19 impacting the automotive industry? https://autohub.property260.com/2020/05/12/how-is-covid-19-impacting-the-automotive-industry/ https://autohub.property260.com/2020/05/12/how-is-covid-19-impacting-the-automotive-industry/#respond Tue, 12 May 2020 17:55:24 +0000 https://autohub.property260.com/?p=3353 It is barely three months since the first confirmed case of coronavirus (Covid-19) in December 2019. But today, normal everyday life has all but ground to a halt in a growing number of countries and we are facing a global economic slowdown. The measures implemented by the world’s governments to stop the spread of coronavirus are affecting almost all industries, and the automotive industry is no exception. This blog takes a closer look at the impact on the automotive sector, and examines the knock-on effect on the leasing industry.

To prevent further spread of coronavirus, most car manufacturers are taking a controlled response, such as by suspending production and putting orders on hold. However, the Covid-19 pandemic is just the latest in a series of challenges for the automotive sector to contend with. After all, the industry has been in turmoil for some time now as it struggles to cope with several rapidly evolving developments. For example, in recent years car manufacturers have had to deal with a shift in consumers & mobility needs, emerging technologies (e.g. artificial intelligence and automation) and ever-tighter environmental regulations, to name but a few.

5 disruptions to the new vehicle supply chain

All in all, the automotive industry is currently being affected by five disruptions that are having an impact on the supply chain for new vehicles:

  1. Suspension of production car makers have put their manufacturing activities on hold to protect employee health.
  2. Supply chain disruption more than US$ 34 billion worth of automotive components are normally imported from China each year. Since many factories in China have been severely affected by the coronavirus epidemic, it has been increasingly difficult for car manufacturing plants to obtain the parts they need. Although many Chinese factories are now up and running again, various other countries have since put restrictions in place limiting the movement of non-vital products (including automotive components) across borders.
  3. Disappearance of sales channels as dealerships around the world are forced to close in order to protect employee and consumer health, many OEMs are finding themselves cut off from their traditional sales channels.
  4. Closure of registration offices non-vital governmental services are also being shut down, making it impossible to register new vehicles.
  5. Decline in demand needless to say, there has been a significant fall in demand for new vehicles on the global automotive market.
    Thankfully,from the OEM perspective, there is also a silver lining to this situation: the declinein demand is causing a buildup of stock. Although high inventory levels are notalways desirable, in this case car manufacturers will benefit from extraagility, enabling them to capitalise on the sudden upswing in demand when thecoronavirus situation normalises again.

Impact on the leasing industry

For the leasing industry, the shortage of new vehicles will pose the biggest challenge in the short term. To help business owners and fleet managers mitigate the effects of this, we shared a couple of tips in our previous blog (2 immediate steps companies can take to reduce the impact of coronavirus on their fleet). Meanwhile, within LeasePlan, we have drawn up a full Covid-19 Response Plan to continuously monitor the supply of new vehicles. In conjunction with LeasePlan’s team of experts who are specialized in the challenging dynamics of today’s and tomorrow’s mobility market, we are committed to ensuring we can adapt to the ever-changing situation in order to keep our customers as mobile as possible. Ask your LeasePlan contact person for more information or support.

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How the Global Auto Industry Is Pivoting to Fight COVID-19 https://autohub.property260.com/2020/05/12/how-the-global-auto-industry-is-pivoting-to-fight-covid-19/ https://autohub.property260.com/2020/05/12/how-the-global-auto-industry-is-pivoting-to-fight-covid-19/#respond Tue, 12 May 2020 17:37:53 +0000 https://autohub.property260.com/?p=3351 At the U.K.’s prestigious University College London Institute of Healthcare Engineering, professor Rebecca Shipley recently became alarmed. Because COVID-19 can quickly infect the respiratory system, and with so many patients requiring breathing assistance, it was clear that hospitals would run out of ventilators long before the virus spread had peaked.

As she talked through the problem with colleagues one evening, they recognized that some 50% of patients with breathing difficulties did not need invasive ventilators and sedation. The team hit upon the idea of improving an off-patent design for a continuous positive airway pressure device. It involves using a mask that fits around the mouth and nose rather than a tube requiring insertion via the nose or mouth. Regulatory approval was soon obtained, but it still needed to be made quickly and in sufficient quantities to keep the stock of invasive ventilators aside for those truly needing them, in order to save many lives.

Enter Mercedes-AMG High Performance Powertrains, the engine division of the Mercedes Formula One team, based in Brixworth, Northamptonshire. The site is one of the leading locations in the world for vehicle design, machine learning, lightweight construction, and other pioneering technologies. Within days, Mercedes had made 100 continuous positive airway pressure devices for testing. Mercedes now stands ready to produce 1,000 a day.

The Mercedes facility forms part of an elite group of engineering companies located in the U.K.’s Motorsport Valley. Their forte is rapid turnaround of projects. Having only known intense rivalry on the track, these teams are now collaborating during the cancelled Formula One season on Project Pitlane, whose goal is to supply hospital ventilators and other medical devices. Just as in Formula One competition, time is the most precious commodity when it comes to fighting a global pandemic.

Meanwhile, in Italy—a country that has been among the hardest hit by COVID-19—Lamborghini is converting departments of its super sports car production plant at Sant’Agata Bolognese to enable it to make surgical masks and protective plexiglass shields. The masks will be donated to the Sant’Orsola-Malpighi Hospital, in Bologna, an early virus hot spot.

The saddlery that usually outfits the interiors of these super cars is being repurposed to produce 1,000 masks a day, and an additional 200 medical shields are being made using 3D printers in the carbon fiber production plant and the research and development department.

On the other side of the Atlantic, Ford’s president and CEO, Jim Hackett, challenged Ford’s designers and engineers to be “scrappy and creative.” The company is making face shields at the rate of more than 100,000 a week, while partnering with 3M to increase the production of powered air-purifying respirators. Ford is also increasing production of GE Healthcare ventilators with the goal of making an extra 50,000 ventilators in the next 100 days.

The approach exemplifies the partnerships with existing medical equipment makers to reduce cycle times from years to just weeks or even days. Just outside Seattle, an early COVID-19 hot spot, medical device company Ventec Life Systems is partnering with General Motors. And in New York State, now the national virus epicenter, Tesla is on the brink of bringing its Gigafactory 2 manufacturing facility back online to make ventilators for Medtronic, another medical device company. To borrow an industry term, these vital initiatives around the globe are arriving on a just-in-time basis.

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