Auto industry heads meet Prakash Javadekar again, reiterate demands

Image: Twitter/ @PrakashJavdekar

Top executives from the automobile industry met Minister of Heavy Industries and Public Enterprise Prakash Javadekar again on May 5, less than five days after their first meeting on April 30.

The automotive industry is seeking urgent government help to tide over the crises, which has seen every company post zero sales in April – a first in its history – as most manufacturing plants remain shut across the country awaiting clearances from authorities.

Cut in Goods & Services Tax (GST), liquidity support, fiscal stimulus were some of the demands made to the minister, a top executive of one of the companies involved in the meeting told Moneycontrol.

“Understandably the minister could not commit anything to us immediately, but he expressed concern and was willing to understand the measures the government needs to take to revive the auto industry. He has promised to discuss our demands with other ministries to help find a way,” the executive said.

At its previous meeting, Javadekar had agreed that the sector needs to be brought back ‘on its wheels’ without giving any firm commitment to any of the industry’s demands.

So far there haven’t been any large scale job losses within the auto sector, following a plea made by the prime minister. Several companies have paid salaries in full for April. However, due to uncertainty surrounding demand as well as over production, auto companies have shown no such commitment for May and June.

By FY20-end India stood as the fourth biggest automotive market in the world, with the sector contributing 7.1 to the country’s GDP, providing employment to over 35 million (including that by auto component), data provided by the Ministry of Commerce and Industry revealed.

The lockdown ordered by the Centre on March 25, whose second phase was to end on May 3, saw more than 25,000 dealerships pull down their shutters overnight. The dealer community employs around 4 million at dealerships and service centers, as per data shared by the Federation of Automobile Dealers Association.

Vehicle manufacturers have not been able to operate their factories because of uneven manufacture of auto parts as many companies lie in the Red zone. Without an interrupted supply of auto parts, it is impossible for vehicle manufacturers to resume production.

Vehicle makers have been demanding opening up of the entire value chain so that there is no hindrance in any production stage.