As the country comes to an emergency standstill in order to battle the COVID-19 crisis, the lockdown has resulted in the paralysis of many industries, including the automotive industry, leading to huge losses.
The domestic automobile sector has already been going through a negative phase with severe underutilisation of capacity due to slow demand over the last year. The coronavirus outbreak and the consequences only add further to the industry’s woes.
Almost all major automakers and component manufacturers in India have pulled down their shutter, with dealerships remaining closed, assembly plants being shut down and workers being sent home.
As per reports, the repercussions on businesses will be alarming and the Society of Indian Automobile Manufacturers (SIAM) has already estimated a minimum loss of Rs 2300 crore each day.
“As per quick estimates by SIAM, it is expected that Plant closure of Auto OEMs and Components will lead to loss of more than Rs 2,300 crores in turnover for each day of closure”, said Rajan Wadhera, President- SIAM in a statement.
According to a report in ETAuto, the Indian automobile industry is likely to suffer an estimated revenue loss of around Rs 13,000 crore – Rs 15,000 crore due to the coronavirus pandemic.
SIAM along with Automotive Components Manufacturers’ Association of India (ACMA) had issued an advisory to the auto manufacturers to halt their plant operations temporarily.
All major carmakers including Maruti Suzuki, Hyundai, Tata Motors, Mahindra, Honda Car India, Volkswagen Group Inida, Mercedes-Benz India, BMW India, Kia Motors, Toyota, Ford, Jeep India, FCA India, Renault-Nissan Alliance have announced temporary suspension of their operations at the manufacturing plants and showrooms.
Among the two-wheeler brands, TVS Motor Company, Suzuki Motorcycle India, Honda 2Wheelers India, Bajaj Auto, Royal Enfield, Jawa Motorcycles, Yamaha India have suspended their production operations at plants in India and abroad as they exist.
The annual business of the sector stands at Rs 7.8 lakh crore and the industry contributes around 7.5% to India’s overall GDP, which accounts for 49% of its manufacturing sector.