The auto industry is not enthused by the Centre's relaxed norms related to industrial activities.
Several two-wheeler, car and truck making companies have been in discussions with state and district administrations over the past few days to assess viability of restarting production.
Companies like Hyundai, Bajaj Auto and TVS Motor Company were still holding talks with officials at the time of publishing this article. While Ashok Leyland said it was ready to restart production, Maruti Suzuki said without support from its vendors. there was no point in reopening its plants.
For companies like Tata Motors, Volkswagen, Bajaj Auto and Mahindra & Mahindra, who have their plants in western Maharashtra (Chakan & Ranjangaon), the relaxation on lockdown won't be too beneficial.
The twin cities of Pune and Pimpri-Chinchwad, where several automotive plants are located, have been declared as containment zones. While areas like Ranjangaon and Chakan fall outside the city limits of Pune, most of the workers travel to these locations from the city.
"The Pantanagar plant (in Uttarakhand) has been granted approval while we are awaiting approvals for Chakan and Aurangabad," Rakesh Sharma, director Bajaj Auto, told Moneycontrol.
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Bajaj's Chakan plant is the newest and most advanced of the three plants and manufactured KTM, Husqvarna, electric Chetak and range of Pulsars.
Though in an earlier communiqué Chennai-based TVS Motor Company said it will only start production after the lockdown is lifted which is expected to be May 3, the company is now holding talks with Tamil Nadu government authorities to find see if it can restart production on a limited scale.
"We are waiting for state guidelines for reopening of the plants to discuss how we should proceed," said Venu Srinivasan, chairman and managing director, TVS Motor Company.
The challenges
According to manufacturers, restarting a totally shut automotive plant cannot be done overnight.
"Yes, we are prepared. Our entire plant premises have been maintained at all times, even during lockdown, by our essential services staff. Our workmen are, predominantly, from local areas, and since, in the initial period we will be operating at very low levels, we foresee no problem in availability. We will gradually scale up (production) and will keep with the demand which will also see only a gradual climb," said a spokesperson of Ashok Leyland.
Two-wheeler manufacturers are in a better position to restart operations compared to car makers given the lower composition of parts and complexities of the vehicle. But every manufacturer has to still depend on third party parts suppliers without which manufacturing cannot begin.
It is a given that supplies have to flow in without any hindrance every day. Any unscheduled shutdown after getting the plants restarted will burn lot of cash compared to when the plant was shut.
"There are many moving parts in getting an auto plant restarted. We have to assess the domestic and export demand too. There is hardly any domestic demand and it is better for us to export. But time and consultation is needed," Sharma added.
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