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Case Code: CLBS148
Case Length: 7 Pages 
Period: 2015  
Pub Date: 2017
Teaching Note: Not Available
Subject :Business Strategy
Organization :--
Industry :Financial Markets
Countries : India

De-risking Automobile Industry from Natural Disasters



In recent years, natural disasters have become more common all over the world. People have suffered a lot due to earthquakes, floods, cyclones, droughts, and heavy snowfall, among other calamities. These natural disasters have claimed thousands of human lives and affected various industries. One such natural calamity was faced by Chennai, one of the largest hubs of the Indian automobile industry, in December 2015 when heavy rainfall, which broke a 114-year record, killed hundreds of people and displaced about two million. The automobile industry was devastated by the Chennai flood and suffered a loss of about Rs. 150 billion. The crisis served as an eye opener to the automobile industry. Industry players have to now re-plan their strategies and think of how to de-risk themselves from such natural disasters.
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  • Analyze the effects of the Chennai flood on the automobile industry.
  • Explore some viable solutions to handle natural disasters.
In December 2015, for the first time in their history, automobile companies in and around Chennai were forced to close down their plants for 3-7 days because of the unprecedented rainfall on December 1-2, 2015. Within 24 hours, Chennai was battered by a torrential downpour, the heaviest the city had seen since 1901. The rain brought Chennai airport and the metro to a halt; schools and colleges were closed, trains stopped running; and all modes of communication including mobile phones and the internet were disrupted (See Exhibit I). The Associated Chambers of Commerce and Industry of India (ASSOCHAM) estimated financial loss of Rs. 150 billion due to the rainfall and floods in Chennai and other parts of Tamil Nadu. Small and Medium Enterprises (SMEs), the IT-ITES industry, and the automobile industry were badly affected by the heavy rainfall and the resultant floods.


Chennai, Flood, 2015, automobile industry, natural disaster, de-risk, crisis management, supply chain issue, production standstill, delay in delivery, plant submerge

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