The COVID-19 has lead to the shutdown of the automobile manufacturer unit for several months, and Indian automakers will not see vehicle sales in April. The monthly auto sales figure to be paid next week maybe just a record-keeping exercise for the auto industry and have never seen zero sales in history. “We are witnessing zero sales in April,” a spokesperson from Fortuner SUV maker Toyota Kirloskar told in an interview.
Worse case is also possible that auto manufacturers may not succeed immediately even if the lockdown is lifted on May 3. He said the highly integrated vehicle manufacturing industry needed an end-to-end supply chain to restart production before it could launch.
India’s automotive industry is heavily import-oriented, and it is challenging to re-engineer the availability chains.
The Society of Indian Automobile Manufacturers (SIAM) has estimated production losses of about Rs 2,300 crore per day for auto manufacturers and dealerships.
“From steering and braking systems, engine parts, alloy wheels and passenger vehicle lighting to injection pumps – all from overseas,” says the number one automaker, “China needs shipping channels with us, which account for all of India’s auto parts 27% of imports”, reports from SIAM confirmed.
Several auto companies, such as Maruti Suzuki, Toyota Kirloskar, Honda Cars India and Hyundai Motors, fall into the green zone, which was allowed to reopen last week, but has no choice if they reopen production units or not.
Toyota Kirloskar, who imports components for the passenger car segment from his parents in Japan, said it was challenging to start construction anytime soon after the lockdown was lifted. The Automotive Component Manufacturers Association said the government should put the entire automotive industry on the list of necessities. They want to reduce the Goods and Services Tax (GST) on automobiles from the current 28% to 10%.