Getting transparency about cost and cash is vital with sales running low. It is not about cutting costs as much as possible, but rather about understanding your cash burn rates to identify potential cost cuttings line by line.
Companies with strong balance sheets who are still doing okay should now define growth opportunities. This includes detecting M&A targets, adapting purchase prices for collaborations and joint ventures, understanding debt levels and residual value developments at leasing, financing, subscription, digital agencies and retail companies. Today “weak” markets should be intensively analyzed for growth opportunities. In addition to new business partners, companies can also use the chance to kickstart plans to transform the relationship with existing business partners. Especially the existing dealer network may see increased disruption by the potential trends towards home working and digital consumption / purchases, if budgets allow.
Beside strong immediate financial support need for dealers, this may be an opportunity for automotive companies to address challenges and redefine working relationship with dealers: shift from a dealer focused sales channel to online / mobile focused sales channel supported by pure plant organized service organizations based on service contracts.
Lock down times in production should be also seen as a chance to improve processes, introduce new quality metrics, software updates or line efficiency improvements or even to introduce flexible production capacities and shut down plants permanently. Also, the need for further IT architecture improvements has become obvious to most of us. Thus, securing liquidity is not only necessary to stay afloat but to position yourself for the world ahead.