Plastic Injection, situation in automotive about COVID-19

Unfortunately, today is very difficult to talk without saying the word of COVID-19. Despiste of this, laying aside the santitary situation, where we do not pretend deepen now(although we understand this is the most important), but obviously we must to take a conscience of near future based on this eventually moment, due to automotive market has changed dramatically in few time, affecting to all supply chain, since OEM to final Tier-n company.

Sector Automoción

Sector Automoción-imagen de intermpresas.net

This year 2020 it already was complicated and strange. Zatec like injection molding company of technical parts in engineering plastics for automotive(mainly), we are seeing each day too many bad news about the stop in the manufacture industry in Spain, there is much uncertainty about the come back to the work in OEMs companies without a clear date. Anyway in ZATEC we will try to be optimistic, because we are looking to return with relative normality and with more force than before based on adequate safety measures, analyzing the current situation:

The pause in the production of several OEMs at national level(we can say global, in multinational companies), affecting to Tier1 companies, where the common is to cancel or postponed the ongoing orders, and therefore this situation generates more uncertainty increasing the “snow ball” kwnown like crisis, rolling down to the next companie in the supply chain. Logically, to avoid the quick spread of virus.

Almost all Tier1 companies have stopped their manufacturing process, many of them wihout previous advise, therefore there are several parts in transit wihout possibility to download up to new message or several orders in injection machines, but these parts cannot be sent. This is more stock, which we do not know what will be the date of delivery.

Talking about stocks, car dealers will decrease their sales. The reason is simple, the people will spend less money or spend the money in other things based on Maslow’s pyramide.  Besides there is the battle betwwen electrical car versus Diesel cars, but this is not the adequate moment to open other debate.

All of this mix implies as follows, if the company does not invoice or the payment terms with their customers are very stifling, the companies will be problems with cash flow. Therefore this is an important value to take in count at this moment, and it would be necessary an action from government to promote this sector or others. As you know, everything is connected. By this reason, this mentioned action from government must be available first for Little and Medium companies, preserving the business fabric. The last crisis began wiht a financial collapse but now we think there is still margin to act.

Anyway, we already working thinking  to return with a relative normal activity based on preventive safety plan. This is an oportunity to improve in all departments, adapting our work according to new situation.

We want to communicate you, the technical and sales areas continue at your disposal with a know-how of more than 25 years of expertise in injection molding, collaborating with customers since deign phase to serial plastic part.

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