Will the Automobile Industry overcome the Lockdown Roadblock?


The second wave lockdown has impacted the Automobile Industry, which saw some signs of recovery last year. Since early April 2021 due to rising cases of the second wave, Maharashtra went into lockdown for the second time.
Though the state government did allow manufacturing units to run operations as per the government guidelines. However, the sales of vehicles were non-operational resulting in higher production costs. Manufacturing units are non-operational considering the lockdown interrupting the supply chain.

Automobile manufacturers like Tata Motors, Maruti Suzuki, Mahindra & others kept several plants across the state shut for maintenance starting May 2021.
The production for the months has reduced by half compared to around 1.4 million vehicles as per the actual plan. After reporting a somewhat positive Q4 for FY20-21 the second lockdown has kept the retail showrooms at bay resulting in sales from where the industry revived- stated an industry expert.

With so many speculations the industry may reduce the production by 60% compared to 3.2lac units produced in March 2021. Lower than the July 2020 production, which helped the sector sell around 2.9lac units of passenger vehicles on an average from October 2020 to March 2021.

The industry is in jittery with more states extending the lockdown and rumors of Nationwide lockdown due to rising cases of Covid-19. The automakers may extend the maintenance shutdown further. The vehicles used to transport industrial gases are shipping medical gases due to the pandemic requirement.

Automakers are issuing advisory measures to all the workers and working towards reopening the plants by mid of May. However, with the retail showrooms and local vendors being shut the increased production costs shall only extend the worries of the troubled sector.

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