Variable demand requires new strategy

Uncertain demand in the original-equipment manufacturer (OEM) and aftermarket environments, owing to the Covid-19 pandemic, is impacting on short- to medium-term capacity management decisions to meet variable demand, says automotive parts manufacturer GUD Holdings CEO Chris Haworth.

“However, opportunities do exist for local manufacturers, especially in terms of localisation or import substitution.”

Availability and service levels are key levers in taking advantage of this opportunity, he says.

Demand in the aftermarket parts sector has been above expectation, but well below pre-COVID-19 levels.

“The reduction in demand differs between the various types of parts we supply, with our service parts holding up best. The benefit of being a local manufacturer has enabled us to leverage this demand,” says Haworth.

However, demand from OEMs and Tier 1 customers has been more severely impacted, as these customers focused on the startup of their assembly plants under new Covid-19 protocols at reduced output levels. Consequently, GUD expects suppressed demand from these customers in the immediate future.

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Company: G.U.D Holdings

Contact: Charlenie Govender

Email: [email protected]