Covid-19 as opportunity to grow up in the automotive industry
Por Eckehard Strumps. Octubre 2020
In just a few months, a mysterious, isolated illness has morphed into a fast-moving, global pandemic, changing the way we live and work and upending entire industries, including automotive.
Other industries are reeling from the repercussions as well, of course. But for automotive, given China’s importance as a leading source of both components and vehicle sales, the impact was particularly fast and fierce, stretching the processes and capabilities of even the strongest companies. Now, more than 95% of manufacturing capacity in Europe and more than 90% in North America lies idle while Asian manufacturing is just beginning to come back online. As demand plummets and sales decline sharply, the question for a number of automotive companies is not how to stretch. It’s how to survive.
MEXICAN DEVELOPMENTS TO FACE COVID-19
Mexico is one of the Latin American countries most affected by the pandemic, with about 305,000 cases and about 35,500 deaths, despite which the president has limited himself to recommending home isolation. The Mexican Foreign Ministry provided the importance of more than 4 500 ventilators for a total of 9 327 beds equipped with these devices, of which 39 percent are already occupied.
Organizational difficulties reign in Mexico since the federal government delegated states the responsibility of managing the pandemic. With laxer preventive measures, more cases are reported. Despite this scenario, Mexican academics have successfully worked on developments that favour the country’s conditions to face the virus.
The Ministry of Health, alongside CONACYT (the National Council of Science and Technology), announced the launch of two Mexican ventilators Ehécatl 4T and Gätsi, fully developed by Mexicans as a response to the COVID-19 pandemic. During the announcement, CONACYT said that these are affordable, high-quality and biomedically safe devices ready to use in Mexico.
"It is a very good news get the goal and already be able to produce this ventilators with Mexican technology and made in Mexico, which will mean being self-sufficient in this basic equipment," said the Mexican president, Andrés Manuel López Obrador during the international presentation of this project in July 2020.
STRENGTHENING RELATIONS WITH NEW INTERNATIONAL BUSINESS PARTNERS
For Mexican industry companies getting in contact with international business partners and take physically part in important meetings and trade fairs is not as easy as in the past. You need business partners located in other countries to help you to get still in contact with future customers and suppliers in Europe, Asia, Africa and Australia.
The German company Expandeers is one example for this job. This company is connecting companies around the world with highly reliable senior business developers located around the global to expand business operations instantly into any market worldwide. Wherever your company is situated and wherever you want to expand to – Expandeers is your reliable single resource for global turn – key business development solutions including sales setup, marketing and digital channel support.
In this difficult times of Covid-19, Expandeers also helped Mexican and European Companies get in contact and fill out the gap in a very quick way if medical devices and personal protective equipment are need. Even in peak times they ensure short delivery times.
This company change their strategy during the pandemic and offers now the additional service to represent several Mexican industrial and automotive companies on important trade fairs in Europe. “Since many years we are a partner of leading automotive and industrial companies. We know the market in Europe and we have a very reliable network of business partners. We help Mexican companies to make business in Europe and getting in contact with new companies.” said Michael Fishan-Reinhard, CEO of Expandeers.
PRACTICAL STEPS FOR RESPONDING TO THE CORONAVIRUS CRISIS IN EUROPE
What about the international business partners of Mexico? How is the actual situation and
how do they react to the challenges? What can we learn of each other?
Germany as one of the most important country in Europe focus in the automotive industry is a very good example. Their economically-essential car manufacturing industry is emerging from a scathing period of lockdown, production halts and a slump in sales.
The sector supports tens of thousands of jobs in Germany and exports are vital to the whole country’s economy; but demand has fallen and the industry faces big challenges in the transition to greener technology.
The pandemic was an opportunity for some companies to focus on Research&Development and look for news strategies and products.
Marquardt Group is one of this examples. From its origin in the Swabian Alps to its worldwide expansion, the Marquardt Group has become one of the world’s leading mechatronics experts since its founding in 1925. Today, Marquardt employs more than 10,500 employees across 20 global locations. They are continuing to grow and advance the future of mechatronics, electro-mobility and digital networking.
They are since many years partner of leading medical technology companies and during the pandemic Marquardt Group also offers masks. The masks are produced in the Headquarter of Germany with the highest quality – so that you can protect yourself and others in the best possible way. That's why they are currently having their protection masks certified according to the standard for medical devices and personal protective equipment.
In the topic of looking for solution against the Covid-19, Marquardt Group work very close with new business partner as Exandeers.
In the End of July 2020, the Baden-Württemberg Minister of Economic Affairs visited Marquardt as part of a “transformation trip” and found out how the company is helping to shape the transformation in the automotive industry and reacting to the Corona crisis. In the course of this, the Baden-Württemberg Minister of Economic Affairs and the Parliamentary State Secretary at the Federal Ministry for Economic Affairs visited the new mask production facility at the Headquarter in Rietheim, Germany.
“Quality masks “Made in Baden-Württemberg ", as produced by Marquardt, not only make an important contribution to supplying the population with high-quality protective products, but also make a significant contribution to securing added value in the country", said the Minister of Economic Affairs Dr. Nicole Hoffmeister-Kraut during her visit.
Marquardt also produces, in other international location, switches for ventilators to combat Covid-19, as well as hose connections that are required in special protective suits for hospital staff. Marquardt Switches’ U.S. Division, for examples, consisting of facilities in Metro-Detroit and Upstate NY will supply Ford Motor Company with essential switches, as the U.S. automotive manufacturer ramps up to manufacture thousands of ventilators to fight against COVID-19. Through a partnership with GE Healthcare, the automaker said it will start assembling ventilators at its manufacturing plant in Michigan.
"The corona crisis hits us in the middle of a phase in which we have geared Marquardt to grow further," says Dr. Harald Marquardt, CEO of Marquardt Group. "In this exceptional situation, the health and protection of our employees, as well as job security for our international locations, are now our top priority. We are very well prepared for after the pandemic. We have a long-term strategy for the future in place.”
WHAT MUST INDUSTRY LEADERS DO?
The crisis demands that company leaders act swiftly and decisively, not just for the good of the firms they helm but because the industry, given its scale and scope, is integral to the global economy.
For the last few weeks our industry has been acutely focused on crisis response and management - making strong, bold moves to shore up the balance sheet and contribute to larger societal efforts at flattening the curve and fighting the virus.
To help OEMs and suppliers navigate this next phase, México Industry suggest the following priorities:
• Review the supply chain in detail. Assess supplier readiness at tier two and tier three levels in terms of both production readiness and financial stability to ensure that you’ll have the parts on hand to restart component production and vehicle manufacturing.
• Stay close to your lead investors. Be clear on your strategy, tactics, and outlook - projecting confidence not just for near-term crisis management but also for how you propose to emerge from the crisis stronger.
• Use the crisis as an opportunity to do right by your people. Work to define an aspirational culture for your company and then to establish it. Lead by example, communicate frequently, and promote an all-hands-on-deck culture.
If we had to use just one word to describe what automotive industry leaders must urgently pursue, it would surely be resilience. Resilience requires creativity and often leads to reinvention.
The structural cost improvements and streamlined networks being forced upon the industry right now can, with long-term vision and reinvention in mind, yield tomorrow’s nimble automotive companies, able to embrace new ways of working, meet future disruption by revisiting global supply chains, and pivot to new business models - including those driven by digitization and electric and autonomous vehicles. There’s strength to be gained for the future in the lessons we are learning today.
Throughout it all, take care of your people, and be a good corporate and community citizen. Do what you can to support the fight against COVID-19. Support broad social-distancing efforts and, where possible, leverage your production networks and supply chains to help manufacture or deliver much-needed supplies, like ventilators and masks.
For more information and a future collaboration with Germany, please contact directly:
Co-Founder & CEO
EXPANDEERS global network GmbH