18 May INDUSTRIES POST COVID 19
The COVID 19 pandemic, also known as Coronavirus pandemic is an ongoing pandemic of coronavirus disease 2019 caused by Severe acute respiratory syndrome coronavirus 2 (SARS‑CoV‑2). The outbreak was identified in Wuhan, China, in December 2019. The World Health Organization declared the outbreak a Public Health Emergency of International Concern on 30 January, and a pandemic on 11 March. As of 4 May 2020, more than 3.5 million cases of COVID-19 have been reported in 187 countries and territories, resulting in more than 247,000 deaths. More than 1.12 million people have recovered.
Industrialization is the period of social and economic change that transforms a human group from an agrarian society into an industrial society which includes global manufacturing, inventory and supply chain systems. As we wrap up talking about the factual aspect of the disease, we are presented with a very serious question; “What will happen to the industries?”
The laptop or mobile device that you are using to read this article more likely have been designed, manufactured, assembled, packaged and delivered to you by all different vendors and sometimes different continents. The economy of trade and industries is one complicated fabric. Pulling out one thread might seem trivial at that time, but we would start to see its implications over time.
With cumulative output loss of over 2020 and 2021 is forecasted to be around $9 trillion, with heavy revenue losses across global industries in 2020 hitting an all-time low with tourism losing a whopping $2.1 trillion, already fainting airline industry would lose around $ 314 billion, the automobile industry which was already in crutches is witnessing a steep decline in demand with 39 % drop in car sales for the US, for China, it was 42% in 1Q20 largely on the near 80% drop in February, which saw only 310,000 unit sales. Overall, the Chinese automotive market remains weak and fragile, with last month having seen 1.3m vehicles sold, a 46% decline over March 2019, in Europe the sales of the new vehicles fell by 70 %, in India the situation is no different and at some front even worse due to the dependency of India on global markets for its automotive part imports. China accounts for 27 per cent of India’s automotive part imports and major global auto part makers such as Robert Bosch GmbH, Valeo AS and ZF Friedrichshafen AG have factories located in the Hubei province; halting production and delivery of vehicle such as Bharat Stage Four (BS-IV) compliant models. April was particularly a washed-out month for the Indian automotive sector, with zero sales. In a first, all major automakers, including Maruti Suzuki, Mahindra & Mahindra, Hyundai Motor, MG Motor, and Toyota Kirloskar, reported zero domestic car sales during the month due to the nationwide Covid-19 shutdown. The halt is costing the industry ₹ 2,300 crores ($306 million) per day, according to an estimate by industry body Society of Indian Automobile Manufacturers (SIAM).
With the plunge major economies have taken across the globe, we are reminded of 2008 and how post-COVID 19 economic scenario is looking excruciatingly painful. Although not all will be lost, with digital technologies taking the lead for the coming decade we cannot help but remain hopeful that fall of certain sectors will be balanced out by the rise of new ones.
The sectors that will be inevitably benefitting from COVID 19 are Pharmaceuticals, healthcare, bioresearch, data storage devices, cybersecurity (with video conferencing apps like zoom, skype, WebEx, bluejeans, google hangouts coming into play), food & beverage industry, digital classes, digital gaming, online grocery, online food ordering & delivery platforms, e-commerce, etc. will be taking the centre stage and we will be seeing a lot of cumulative & unprecedented growth in these sectors. On the technology front, worker robots will finally be a substantiated thing.
Maybe it is too early to forecast any minor shift but the overall idea is to induce preparedness across industries globally and the cue is to make your own country self-reliant to avoid major losses. The shift in paradigm has already started and we need to adapt ourselves accordingly. It was in 1869 that Charles Darwin gave us the theory of “survival of the fittest”. Like a Turing test, we keep testing this theory unknowingly. Let’s watch out for the steepest crests and troughs in the industry after a long while.
Written by Astha Shri.