Plan for a ‘U’, Prepare for a ‘W’: APMA discusses industry restart 

Toronto, Ontario ⁠— Canadian automotive supply chain leaders believe the industry should prepare for a ‘W’ curve when business returns to normal.

During APMA’s May 14 webinar entitled Restarting Supply Chains and Trade, Jérôme Thirion, national supply chain leader for KPMG in Canada said the industry should “plan for a ‘U’ curve, but prepare for a ‘W’” as pandemic restrictions are lifted.

“We could see COVID-19 restrictions return toward the end of the year, which implies a greater recovery period at the end of the year through 2021,” said Thirion. “We’re generally suggesting the industry prepares for a ‘W’, just to be prepared.”

Thirion said businesses should focus on their post-COVID timelines in three parts.

“Think about it in three steps—what to do now, how to prep the summer and into the fall and winter. Are your operations ready for turbulence in the short term? Look over the forecast with your customers and suppliers to prepare for the worst-case scenario⁠—define and reevaluate strategies and potential risks,” he said.

Joseph McCabe, president and CEO of AutoForecast Solutions, added that there are a lot of “ifs” when it comes to a successful restart of Canada’s automotive industry.

“It’s all about the ‘ifs’ in this conversation⁠—if people are allowed to go out buy vehicles; if people are employed and have the funds to buy,” said McCabe.

However, when the industry does roar back to life, McCabe says there will be a “new consumer” for the industry to consider.

“If we achieve a very calculated, uniform state of recovery, we see this potentially new consumer come into the conversation,” said McCabe. “It’s not a big group, but it is a group to consider: those that are so shaken by the COVID issue that their current public transportation habits will be translated into personal transportation. We could see a potential urban buyer that may have been using public transit moving into the market.”

While the group may be small, McCabe says companies could leverage the urban buyers’ habits to draw in business.

“This is the person that won’t pay $1,000 for a new iPhone, but will sure pay $30 a month for it. Incentivize the consumer using better terms on payments and things like that to drive sales,” he said. “But there’s a lot of pieces to this puzzle to get everything moving forward in a proper way.” 

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