The COVID-19 Impact on Supply Chains, Focusing on the Automotive Segment during the Second and Third Wave of the Pandemic

Abstract

In the last few years, there have been several big changes in the automotive industry, and global automotive supply chains have faced many challenges, mainly due to the COVID-19 epidemic. The virus had several huge impacts on the global market, with different risk management approaches companies and global supply chains needed to adapt to the altered situation. During the second and third wave of the epidemic, several regions and countries were under lockdown for different intervals in order to stop the spread of the virus. Some countries entered lockdown for the first time, and many of them entered lockdown again, as when the first wave occurred. The economy of the Philippines is dependent on electronics-related industries, which faced extraordinary risks from different sources, and these industries suffered severe consequences because of COVID-19. Crucial automotive suppliers outsource their production facilities to the Philippines region, and the dominant semiconductor segments were heavily impaired due to the lockdowns. Electrification in the automotive industry and the spread of electric vehicles is becoming increasingly important due to rapid technological development. The economic shock caused by COVID-19 forced companies in this sector to diversify their supply chain activities in order to stay competitive, minimize the supply chain-related risks and to start recovery processes. The authors analysed the risks, position, opportunities, challenges, difficulties, reactions and solutions of a certain automotive supplier, which was heavily reliant on the Philippines, and Chinese suppliers.