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  • Subject Name : Management

Automotive Industry Amid Global Covid -19 Crisis

Table of Contents

Introduction.

Problem Statement

Aim and Objectives of Research.

Research Question.

Rationale and Scope.

Literature review..

Methodology.

Research Design.

Data collection.

Data Analysis.

Ethical consideration.

Limitations of study.

Gantt chart

Reference.

Introduction to Impact of Covid-19 Pandemic on Automobile Sector

COVID-19 shook the economies across the globe, started as a health crisis; it swiftly turned into an economic crisis. The pandemic spread at an enormous rate, infecting millions of people across the globe, and the restrictions to stop transmission caused contracting of the economic activities, France was highly affected. The lockdown measures were adopted by the country to reduce the effect of the spread of infections. The restriction imposed caused people to stay at home, closure of businesses, and curtailment of economic activities other than essential economic activities, the expected fall in GDP in 2020 is 12.5% for France (IMF, 2020). The effect of the COVID-19 pandemic and the measures to stop the transmission were not just limited to the particular sector but impacted all the sectors across the economy, the automobile was highly hit. The anticipated shrinkage of the automobile industry due to COVID-19 for the financial year 2020 is 12% -15 % (Meticuloiys Market Research, 2020)

Problem Statement

The title of this study is “the impact of the COVID -19 pandemic on automobile sector in France. COVID-19 which initiated as the health crisis adversely impacted the economic activities and resulted in the global economic depression. The containment and the lockdown measures restricted the movement of goods and services as well as the movement of people. As a consequence, the automobile sector was adversely hit. The purpose of selecting this topic for research purpose is to analyze the impact on the automobile sector since the automobile sector contributes highly to the Gross Domestic Product of a country and provide employment opportunities to millions of people.

Aim and Objectives of Research

The aim of this study is to analyze the impact of the COVID -19 pandemic on the automobile sector of France.

The objectives of this study are as follows:

  • To understand the reasons behind the downfall in the automobile industry
  • To understand how the demand and supply for automobiles were impacted.
  • To compare the pre COVID condition of the automobile sector and the condition after the lockdown measures were eased.
  • To thoroughly analyze the effect of government policies of the French government on the automobile sector.

Research Question

The primary research question is, “How the automobile sector was impacted by the COVID – 19 pandemic in France?

The secondary research questions are:

  • Why the automobile sector was hit?
  • How the demand and supply of automobiles were impacted?
  • Compare and contrast the position of the automobile sector before it was hit by the pandemic and after the easing of the lockdown measures.
  • What are the potential effects of the government policies that were taken to recover the automobile sector?
  • How the findings of the study can be put to use and how the results can provide a new direction to stimulate the recovery process in this sector?

Rationale and Scope

The purpose of this research is to analyze the impact of the COVID -19 pandemic on the automobile sector In France. It is essential to understand the background of the study to compare the position of the automobile sector prior to the COVID-19 and the position after the sector was hit by the pandemic. Moreover, the study covers how the demand and supply of automobiles were impacted along with the potential effects of the policies measures taken by the French government on the recovery of this sector will be elucidated.

Literature Review of Impact of Covid-19 Pandemic on Automobile Sector

In this section the researcher provides a summary of the already published research, this is done to provide a background for this topic being considered. It also shows what recent progress has been made in this area of study and indicates any gap in the study.

The automobile industry is one of the growing industries in France along with it is an attractive automobile destination as it is endowed with geographic location, excellent infrastructure, and skilled manpower (Business France, 2019). The government is promoting this sector and took measures to fasten the work for the Mobility policy act as well as developing strategies for using self-driving vehicles. The automobile sector employs 4,000 individuals and a turnover of 155 MD €, which is approximately 18% of the manufacturing industry turnover (Business France, 2019). The automobile sector is responsible for 49 billion € exports (Business France, 2019).

French automotive industries have been experiencing major challenges since the end of 2018 this was caused by strict environmental regulations. The tier 1 and Tier 2 businesses were mainly hit by this decision as a result the profit for these firms has reduced drastically. According to the report of Altradius ( 2019), the automotive sector contribution to GDP was 0.6% in 2018, 3.6% in 2019 while the expected forecast for 2020 is negative at 7.4%. (Altradius, 2019). However, COVID-19 posed more severe challenges to this industry. The light commercial vehicle market declined by 24.8% to 240,923 units, in the first eight months of 2020, however, the French market for vehicles that were more than 5 tonnes reduced by 34.1% in absolute term it is 25,462 units (CCFA, 2020). Passenger vehicle registration has been declined enormously in 2020, with the highest decline of 72% in the month of March followed by 58% in the month of April ( OECD, 2020). With government policies to stimulate this sector, there has been a rise in the number of passenger vehicle registration which started to rise from the month of May 2020 (OECD, 2020).

According to the survey conducted by Federation of Vehicle Equipment Industries (FIEV, 2020), in France 73% of the equipment producers witness stagnancy in their commercial activities, 47% had to curtail their production as they found it difficult to maintain the social distancing.

The government has adopted fiscal policy stimulus to support the automobile sector that comprises pushing €8 billion to this sector by the means of policies that comprise of the promoting renewal of the French car fleet emphasis on less carbon-emitting vehicles (Ministre De L'économie Et Des Finances, 2020). Along with it, the focus is technologically advancing and promoting digitization of the production chains and encouraging support to organizations as well as employees. The employees are encouraged to upgrade their skills by the means of vocational training schemes (Ministre De L'économie Et Des Finances, 2020).

The automobile industry across the globe is impacted by the COVID -19 pandemic, however, timely actions by the government will prove to be beneficial for this industry. In the case of France, the demand and supply of automobiles were impacted. There is no significant literature available in this context as to how the changes in demand and supply of automobiles impacted the industry and in turn impacted the entire economy. Moreover, the potential impact of government measures to recover this industry will be studied in depth.

Methodology

The research methodology chapter of the research paper will explain what is to be done in order to reach the conclusion and how it is to be done. This section includes details of the method of research which has been selected, the research approach, the data collection tools, method of data analysis, and the limitations of the study. This is undertaken so as to establish the reliability of the study.

Research Design

Quantitative data are put to use when the researcher tries to address the problem associated with numbers and quantity and attempts to answer, how many types of question (USC Libraries, n.d.). The data is collected using structured research instruments. The data is in the form of numbers and statistical values and presented in the form of tables charts, figures, etc. (USC Libraries, n.d.). Quantitative data will be used so as to generalize the concepts more widely and to anticipate the result of the future. It provides for greater accuracy of the results as it summarizes the data that aids in the generalization of the phenomenon that is considered for the study (USC Libraries, n.d.). In the research study, the quantitative data is used as the focus is on changes in the values of demand and supply and the potential change in the GDP. The potential (forecast) effect of policies on the sector. The quantitative methods will be used as the research can be replicated and then can be examined again by other researchers, a research was done by one researcher can be a base for conducting other researches, as a result, it open more windows for the topic that is considered. Also, the quantitative study makes it relatively easier to use comparison across different categories and periods. Moreover, the advantage of this type of method is the curtailment of personal biases. 

Data Collection

This section will provide details of the tools and methods that are used to gather information and to find the variables that will be taken for the study. Along with it, the methods that are used to summarize the data so as to reach the conclusion are provided.

Secondary data uses information that already exists, the original data has been collected already by some other individual or organization and made available so that other researchers can access it (Vartanian, 2011). Secondary data is easily available, it saves time and cost. It can be accessed through the internet. The statistical software such as SAS, SPSS, or STATA can be easily applied to the data (Vartanian, 2011). The credibility of the secondary data is ensured when the data is collected through official data sets provided by the authorized institutions (Vartanian, 2011). The data will be collected from Journals, the official website of the government, and other institutions.

Data Analysis

Data analysis can be understood as the procedure that pertains to the application of statistical techniques to explain, evaluate, and examine data (Kent, 2015). The descriptive research analysis helps to provide information about a particular phenomenon. The data is gathered and then arranged in the form of tables, it mainly uses graphs and charts for a pictorial description (Erickson, 2017). The descriptive research method is aptly used in this study to make data more manageable and arrange data so as to form a pattern that supports the findings (Erickson, 2017). 

Ethical Consideration

The research study will comply with all the ethics, even from the beginning the aim of this study is to not harm the sentiments of any group and communicate the findings without any prejudice. The information is taken from authentic sources and the contribution of other researchers is cited.

Limitations of The Study

Limitations comprise of the details of the factors that can impact the findings of the study. This section pertains to information on missing data and how the data that is missed or not accessible will not impact the analysis. The factors that could impact the findings of the study which can not be controlled by the researcher are associated with the accessibility and availability of data. Since it is a new topic, there is a lack of availability of research studies on the topic. Data sets that are gathered in the past may not answer accurately the changes that occurred recently (Vartanian, 2011). Moreover, Secondary data may not provide the exact data that one is looking for. It may answer

Gantt chart indicates the time required in order to take the research study. It specifies the time period that will be required to undertake and complete the project. It helps the researcher to make sure that each section is completed as per the deadline. The Gantt Chart for this research proposal is presented below :

 

Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Background

           

Aim & Objectives

           

Research Questions

           

Rationale

           

Scope

           

Literature Review

           

Research Methodology

           

Data Analysis

           

Conclusion

           

Reference for Impact of Covid-19 Pandemic on Automobile Sector

Business France (2019). Producing tomorrow’s automobiles in France. Retrieved from https://www.businessfrance.fr/Media/Production/INVEST/producing-tomorrow-s-automobiles-in-france.pdf

CCFA (2020). The French market fell 19.8% in August and 32% over 8 months. Press Release. https://ccfa.fr/

Erickson, G. S. (2017). New methods of market research and analysis. United Kingdom: Edward Elgar Publishing.

Federation of Vehicle Equipment Industries. (2020). Covid-19: automotive suppliers fully mobilized for employment in the face of the challenges of the health crisis and the recover. Press Release. https://www.fiev.fr/upload/docs/application/pdf/2020-04/cp_fiev_covid19_situation_equipementiers.pdf

IMF. (2020). World economic outlook, June 2020. Retrieved from https://www.imf.org/en/Publications/WEO/Issues/2020/06/24/WEOUpdateJune2020

Kent, D. R. A. (2015). Analyzing quantitative data: variable-based and case-based approaches to non-experimental datasets. United Kingdom: SAGE Publications.

Kumar, R. (2018). Research methodology: A step-by-step guide for beginners. United Kingdom: SAGE Publications.

Meticulous Market Research. Automotive industry amid global COVID -19 crisis. Retrieved from https://www.meticulousresearch.com/covid-19-article/automotive-industry-amid-global-covid-19-crisis

Ministre De L'économie Et Des Finances (2020). Support plan for the automotive sector. Retrievbed from https://www.economie.gouv.fr/covid19-soutien-entreprises/mesures-plan-soutien-automobile#

OECD (2020), Passenger transport (indicator). Retrieved from DOI: 10.1787/463da4d1-en

USC Libraries (n.d.). Organizing your social sciences research paper. Retrieved from https://libguides.usc.edu/writingguide/quantitative

Vartanian, T. P. (2011). Secondary data analysis. United Kingdom: Oxford University Press, USA.

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