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Last Updated : Mar 24, 2020 09:38 PM IST | Source: Moneycontrol.com

Coronavirus pandemic | Auto industry per day loss pegged at Rs 2,300 crore

Shutdown of all showrooms following government's strict orders has exacerbated the industry's woes.

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The automotive industry is expected to take a hit of more than Rs 20,000 crore during the first nine days of shutdown due to the coronavirus outbreak.

Manufacturing activities ceased mostly from March 22  after the Maharashtra government decided to enforce work from home more strictly in the state. Companies having plants in Gujarat, Haryana, Karnataka and Tamil Nadu also followed suit to shut operations by March 23.

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The Indian automotive market has produced an average of 75,000 vehicles every day so far this year, clocking production of nearly 25 million units till end of February, according to the industry’s top lobby body the Society of Indian Automobile Manufacturers (SIAM).

"As per quick estimates by SIAM, it is expected that plant closure of auto original equipment manufacturers and component makers will lead to loss of more than Rs 2,300 crore in turnover for each day of closure," said Rajan Wadhera, President, SIAM.

Shutdown of all showrooms following government's strict orders has exacerbated the industry's woes. More than 500,000 units of two-wheelers, more than 5,000 passenger cars and little over 8,000 units of commercial vehicles powered by Bharat Stage IV engines are yet to be sold.

After the Supreme Court decided deadline of March 31 these vehicles will become useless since BS4 stock cannot be sold or registered. Only BS6 stock will be allowed to be registered. Hero Motocorp, the country’s largest manufacturer of two-wheelers became the only company to make an appeal to the SC to provide it three months extension to exhaust its BS4 stock most of which is lying with its dealers.

The automotive sector, which contributes 7.1 percent to India's GDP, has been pleading to the government to reduce GST rate to 18 percent from 28 percent to boost sales. The government, however, is yet to pay heed to that request.

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First Published on Mar 24, 2020 09:33 pm
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