The Indian auto industry will be very adversely impacted by the ongoing COVID-19 crisis.
The shutting down of plants temporarily by all auto OEMs and component
manufacturers across the country will trigger a loss of more than Rs 2300 crore
in turnover for each day of closure.
a terse note by the Society of Indian Automobile Manufacturers (SIAM), its
president Rajan Wadhera noted that the Indian automotive industry will be majorly
impacted by covid-19 and that “As per quick estimates by SIAM, it is expected
that plant closure of Auto OEMs & Components will lead to loss of more than
Rs 2,300 crore in turnover for each day of closure.”
March 21, 2020 just when the Indian auto industry had decided to down their
shutters to safeguard their employees against the coronavirus disease or
covid-19 till March 31, came the announcement by Prime Minister Narendra Modi
that the entire country will be in a state of lockdown for 21 days beginning March 25, 2020. That
would mean that if and only if things go fine, business may get back to usual.
though many auto OEMs started their plant shut downs from March 22 onward, we
shall just take into account the losses for 21 days of closure. By SIAM’s
estimate that would mean a whopping Rs 48,300 crore of turnover. This is just an estimate for auto OEMs and
auto components business. The losses will mount further if one were to take into
account other support industries like logistics, etc.
initial list of Indian companies that temporarily shut down their production included
Maruti Suzuki, Mahindra & Mahindra, Honda Cars India, Honda Motorcycle
& Scooter India, Fiat Chrysler Automobiles (FCA), Hero MotorCorp, Tata
Motors, Sonalika, Okinawa and Toyota Kirloskar. But with the PM’s fresh announcement,
the entire country is in a lockdown that would include every auto OEM as well
as component manufacturers in the country.
closure of plants will add to the woes of the Indian auto industry which is
already reeling under problems like sliding sales, transition related problems
from BS IV to BS VI, a muddled auto policy that wants to promote electric
vehicles at the cost of growth of IC engine vehicles, etc.
government has not said anything about the issue related to transition of
vehicles from BS IV to BS VI. In fact the Federation of Automobile Dealers
Associations (FADA) President Ashish Harsharaj Kale had earlier mentioned that
there are huge unsold BS-IV inventory and with the coronavirus (Covid-19), sales
had come to a standstill.
before the nation went into a lockdown, there was a drastic drop in sales and
customer walk-ins were reduced to a trickle. Counter sales fell by 60-70%
across auto dealerships much before the lockdown.
noted that many FADA members may face dealership closures if left over with
unsold BS-IV stocks. He said that FADA had approached the Supreme Court with a
request for permission of sale and registration of BS-IV vehicles till 31st