The country's auto sector, which is already struggling for more than two years, is expected to bleed further. The closure of manufacturing plants of major automakers is expected to result in a loss of more than Rs 21,000 crore in a short span. Similarly, in the wake of the Coronavirus outbreak, the equipment manufacturers (OEMs) and automotive component makers have also closed down their manufacturing units.
Two industry bodies including the Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association of India (ACMA) have advised their members to shut down their plants to contain the spread of deadly Covid-19. In a statement by Rajan Wadhera, President, SIAM, "This is in line with SIAM's motto of building the nation, responsibly."
Temporary shutdown at major automakers
As per a report in Deccan Herald, following the advisory from SIAM, leading automobile manufacturers including Maruti Suzuki India, Tata Motors, Hyundai, Toyota Kirloskar Motor and Hero MotoCorp have temporarily closed down their manufacturing plants. After shutdown, SIAM has argued that the close down is going to affect the health of the already reeling autos sector. Wadhera in a fresh statement said, "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."
The auto industry is going through its worst phase in India. Since 2016 multiple factors including Demonetization, the introduction of Goods and Services Taxes (GST), hike in mandatory insurance, slowdown in the Indian economy has badly impacted the sales of the auto vehicles. The latest headache of the automakers is the huge stocks of BS-IV vehicles at the dealerships that have become a new headache as the deadline nears.
As per the governments' direction, the registration and sale of any BS-IV vehicle will not take place on April 1 onwards. With the new regime almost days away, the dealerships are witnessing a huge inventory of vehicles lay unsold. Notably, SIAM has filed a petition in the Supreme Court seeking relief on the cut-off date of March 31, 2020, for the sale of BS-IV vehicle.