The automobile industry is facing a huge amount of loss amid lockdown.
The automobile industry has been badly affected amid the lockdown imposed over COVID-19 in the country. The lockdown has made the entrepreneurs lay stiff.
The industry body of Society of Indian Automobile Manufacturers (SIAM) has predicted a 20 percent fall in revenues. In the worst-case scenario, passenger vehicle sales could decline by as much as 20-24 percent in the country due to the crisis resulting from the pandemic.
“Indian automobile industry is facing loss like any other sector in India. It needs a lot of financial mobility. Thousands of people are employed in this industry. We are facing major losses and also salary cuts, resulting in job loss,” said Mr. Vinay Sharma, an official of a motor company.
Data from SIAM shows that passenger vehicle sales have dropped from 3,377,389 units to 2,775,679 units from March 2019 to that in 2020, almost an 18 percent drop. Similarly, commercial vehicle sales have suffered a loss of about 29 percent since last year. The auto industries are at a loss of Rs. 2,300 crore in production turnover for every day of this closure.
The industry is trying to engage with the Indian government on policy measures that could minimize the impact of COVID-19 on the Indian economy, particularly the domestic automobile sector.
Recently, the automobile dealers wrote to Prime Minister Narendra Modi seeking his intervention to support of the coronavirus hit industry, which is in dire straits.
“To have prosperity in the society healthy motoring is also necessary. Commercial vehicles contribute significantly to the sale of spare parts. Vehicle manufacturers depend a lot on the sales of spare parts. Relief packages to any sectors will also help the vehicle industry but direct packages will help the future of this industry,” said Mr. James Mathew, Ex-President of a leading manufacturer.
Federation of Automobile Dealers Association FADA is seeking working capital support by resetting the clock for the period of the lockdown for auto dealers on all working capital.
Picture credits- Qz.com
