COVID-19 Induced Supply Chain Disruptions and Automotive Industry: A Case Study of Maruti Suzuki India Limited and Mitigation Strategies

Abstract

The paper analyzed the impact of the COVID-19 pandemic induced supply chain disruptions (SCDs) on the Indian automotive industry (IAI) using a case study of Maruti Suzuki India Limited (MSIL), which share about 50% of automotive market in India and offered mitigation strategies and the SCDs recovery model. The study revealed that the IAI is unlikely to achieve its target for 2021-2022 due to pandemic induced SCDs and MSIL is no exception. The study revealed that in 2019-2020, the MSIL reduced its production several times to adjust dealers’ inventories in view of unprecedented economic slowdown and the prolonged domestic slump in automobile industry. In 2020-2021, MSIL is still facing severe disruption risks caused by the COVID-19 along with other OEMs in India and globally. In the first wave of the pandemic in India, MSIL production was totally halted and domestic sales were virtually zero in April 2020. During the second wave of the pandemic crisis in India, MSIL again experienced a severe fall in production and sales performance due to regional lockdown restrictions and SCDs. The rapid decline in production of MSIL has been mainly due to the pandemic induced lockdown and the SCDs in auto-components and halt in manufacturing activities. Therefore, robust mitigation strategies are needed to recover from the COVID-19 induced SCDs. The suggested model focused on the SCDs and risk management and offered the proactive and reactive responses for speedier readjustment of automotive industry from the COVID-19 pandemic induced SCDs. Ending the COVID-19 era and its impact on SCDs will not only depend on government policies, but also on proactive and reactive risk mitigation measures initiated by the firms. Robust measures should be taken to tackle the current supply chain threats in automotive sector to build the resilience of supply chain systems to safeguard them against business downturns.