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Insights

There will be greater focus on the integrity and safety of the supply chain

Conversation with Tina Zhou, CEO and Founder of GASGOO International, Chief Editor of GASGOO

convo-with-Tina-Zhou

How has the crisis affected your market?

The impact of the epidemic on the automotive industry is comprehensive and far-reaching, mainly reflected in the following aspects:

Global car sales continue to decline.

 The data shows that in April the sales volume of automobiles in most markets in the world decreased further than in March. Sales in countries such as the United Kingdom and Italy even fell by more than 90%. Sales in markets such as the United States and France hit new multi-decade lows, and the Indian market is at zero sales. The Chinese market experienced a downturn in February and March. Now, with the epidemic mitigation measures and recovery activities, it is gradually returning to normal.

Deglobalization of the supply chain, especially in important markets. There will also be greater focus on the integrity and safety of the supply chain.

 This outbreak caused many regional factories to stop production and shut down. Logistics were also blocked, which greatly affected the stability and safety of the supply chain. This allowed many companies to re-position the globalization of the supply chain, especially in larger regional markets, and gradually form a relatively closed-loop supply chain to ensure supply and production. China also attaches great importance to the safety of the supply chain, especially in the R&D and production of key core components, which will accelerate localization. 

Acceleration of the transformation of the vehicle sales model and changes to the traditional dealership system.

For the vehicle sales model, livestreaming sales has become a new trend this year. Car companies will increase brand building and consumer engagement, strengthen the links between online and offline, and use multi-channel sales conversion in all directions.  All of this will further affect the traditional distribution system.

Encouraged the application of various new technologies in the field of automobiles and travel.

Smart cars will increase the product benefit of the car itself and stimulate consumer purchasing. The amount and pace of R&D investment in this area is accelerating. Meanwhile, more users have begun to focus on "health car" technologies which has forced car manufactures to invest in R&D on related technologies and applications

Started a new round of elimination games and accelerated the industry reshuffle. 

The economic downturn combined with the impact of the epidemic is a huge test for the operation of enterprises, whether upstream or downstream in the supply chain. Many companies’ normal operations will be affected due to the sharp decline in orders and the inability to resume steady production. At present, some companies have adopted measures such as salary reductions and layoffs to control costs and ensure cash flow; other companies have locked down, closed factories, or gone bankrupt. In the past few years, new vehicle companies were booming. However, except for the first few companies that have achieved mass production, other companies will face a test of life or death.

Are we going to restart as quickly as possible or do you think we will be able to rethink the world tomorrow?

China has made significant progress in its fight against the epidemic, and now it is pretty much under control. The whole country is refocusing on economic development, production promotion and job stabilization. Companies have also accelerated the resumption of work and production. Central and local governments have successively issued a series of stimulating policies to promote automobile consumption. According to the data from April to May, China’s auto market has gradually rebounded. However, the era of high growth is over, and market competition will continue to increase. The entire industry will evolve from extensive investment to refined operation. At the same time, the requirements for environmental protection, intelligence and power diversification of automobiles will continue to increase.

What impact and inspiration does it have on your personal life?

In essence, this is a war between humans and viruses. Before the development of new, effective drugs, life will still be fragile. During the "shelter in place" period this year, I was always concerned about the development of the epidemic and the frontline situation of medical staff. I am very grateful for their sacrifice and protection that guaranteed everyone’s safety. In addition, when facing such a major crisis, the country responded quickly, concentrated national medical resources on supporting Hubei, focused on epidemic resistance, and mobilized the citizens to stop movement and reduce the chance of virus transmission. This was a very wise decision.

During this time, we also pressed the pause button on our lives, and were able to rethink the value of life. After returning to work, I believe most people will work hard and live with gratitude. After all, every day is another day removed from hardship.

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