Vietnam Automotive Industry: Impact of COVID-19 and Navigating the Turbulence

Visibility is key to managing liquidity.

By knowing what your cash position and cash flows are, you can prepare for, respond to and ultimately emerge stronger from this ‘new normal’.

Steps to consider:

• Take step by step to plan the “what, how and when"
• Implementation of a cash conservation and liquidity management office gives better control of the organisation’s cash position
• Develop a dynamic, rolling 13-week Short-Term Cash flow Forecast and ongoing process

Employees’ welfare is the top concern for corporate leaders.

A significant share of those people do jobs in factories where components and vehicles are assembled and so cannot be performed remotely. If infections spread and a large percentage of the workforce gets sick, it could drastically reduce production capacity. That means keeping the big picture — a safe, healthy workforce — in focus may also be what’s right for the bottom line.

To prepare for the long haul, here are some key focused areas:

• Remote working enablement and compliance 
• Build a business continuity planning 
• Provide continuous communication and connect 
• Cost and productivity 
• Virtual capability building 
• Transitions management 
• Urgently ‘rewire’ HR policies for relevance 
• Employee health and wellness 

COVID-19 urges automotive companies to rethink their supply chain model.

The crisis will continue to be very disruptive for supply chains due to decreasing demands and unpredictable buying behavior, supply delays or cancellations, supply bankruptcy, delayed deliveries, limited workforce or shut downs, etc... 

A few key things to consider during this period:

• Have you established a cross functional task force?
• Have you performed an operational and financial risk assessment across the supply chain and supporting business functions and updated your contingency plans?
• Have you established a short-, mid- and long-term mitigation plan for demand, supply and workforce?
• Have you conducted scenario planning exercises to understand the operational implications, both financial and non-financial, of various scenarios?
• Have you set up a temporary inventory recovery and evaluation process?
• Have you leveraged the latest tools, technologies and data analytics to create ongoing transparency as rapidly as possible?
• Do you have track and trace solutions in place at your manufacturing sites or delivery centres?
• Have you evaluated strategies for alternative sourcing, including the impact of tariffs to cost?
• Have you accessed governmental support and cross industry synergies and partnerships?
• Are you preparing for the up-swing? – “History shows that SC struggle most with the up-swing”

Automotive companies are now embracing digital transformation at an accelerated pace.

Amidst the unknown variables of COVID-19 and the new reality, one thing is certain: organisations are now embracing digital transformation in everything they do at an accelerated pace. And automotive company is not an exception.

More than before, businesses need to create a differentiated experience for their customers in the digital marketplace. As the world moves into adopting new ways of virtual working, cybersecurity, digital finance, data optimisation, digital upskilling and transformation are now key pillars that need to be embedded across organisations to better enable both businesses and their clients to work together and co-create solutions.

Key focused areas:

• Target 'Work from home' workforce and functions 
• IT and security tools
• IT and cyber security governance 
• Hardware and data centres
• Software and licensing 
• Bandwidth sizing and data backup 
• Cyber security considerations 
• Remote working ways