Impacts of the COVID-19 Pandemic on Supply Chains of the German Automotive Industry

Citation

Thiems, Marcel. (2022). Impacts of the COVID-19 Pandemic on supply chains of the German automotive industry. (Master’s independent study). Bangkok: Master of Business Administration Siam University.

Abstract

The COVID-19 pandemic has dramatically changed our daily lives in a very short time. International supply chains, such as those of the German automotive industry, have experienced major disruptions. Border closures or production stalls caused these supply chains to collapse due to increasing globalization on both the supply and demand side and the associated dependency on global flows of goods. This led to bottlenecks, fluctuations in demand as well as delays along the entire value chain. The aim of this paper was to illustrate the impacts of the Covid pandemic along the supply chains of the German automotive industry. Potentials were identified to be able to react more effectively against crises in the future. This work used literature review, and used various articles of management consultancies and statements of German car manufacturers. The obvious impact of the COVID-19 pandemic could be seen at border closures, government measures such as home office obligations, and lack of materials. Companies had to adapt their processes in a very short time and there was a drop in demand in the automotive sector. The theoretical findings identified four major factors that influenced the disruption of the supply chains. These included complexity, communication, risk management, and geopolitical factors. Due to the low vertical integration of the German automotive industry and the resulting high dependency on suppliers, the optimization of these factors is essential in order to be able to react better to crises in the future. A fundamental step could be the digitalization of supply chains and the transparency of communication between all parties. In addition, adjustment of inventories and procurement at a national level should be taken into consideration, which is the key to ensuring supply chains for the obvious more disruptive future ahead.

Keywords: supply chain, German automotive market, COVID-19 Impact.

Impacts of the COVID-19 Pandemic on Supply Chains of the German Automotive Industry

Master of Business Administration (International Program), Siam University, Bangkok, Thailand

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