New Financial Year Brings Jittery For The Automobile Industry!


On Wednesday, 14th April 2021 Hon. Chief Minister of Maharashtra Mr. Uddhav Thackeray announced a lockdown in Maharashtra. As per the government guidelines, only essential services shall be functional. However, the government has permitted manufacturing units to operate. By the showrooms being shut, the situation is like “You have a job but no Salary”.

The automobile manufacturing units operated with a reduced capacity and functioning the factories at approximate 50-60% of the normal production capacity. With these reduced productions the industry is projecting revenue loss of ₹ 100- ₹ 150cr. on a daily average. The automobile sector in India accounts for around 25% of manufacturing units in Maharashtra.

Auto giants like Mahindra & Mahindra, Tata Motors, and Volkswagen are operating at reduced manpower. Whereas, global brand Mercedes only operated their paint and body shop units partially with no new production. Bajaj Auto functioned as usual following all government guidelines. Considerable units manufactured by Bajaj and the government had exempted Exports.

Compared to the 2020 lockdown, several industries are exempted from total lockdown followed by strict safety guidelines. Manufacturing units are functioning with limited workers but quite a few fear the raising cases could raise further hurdles.

According to industry experts, the lockdown shall result in a major loss for Maharashtra with the passenger vehicle segment recording approximately 25000 units. Wherein the average production of the segment is 2200 per day.

The automobile sector earlier this month had shared the Q4 results for FY 2020-21 and was counting on the festive season in the 1st quarter of FY2021-22. The lockdown has worn out the hope of recovery and the revenue loss may be sharper than the previous year.

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