Coronavirus Pandemic Impacts India’s Struggling Auto Industry, Vehicle Production Critically Disrupted

FY20 has been a troublesome yr for the Indian car trade. After going through gross sales crunch attributable to GST and the upcoming BS-VI norms, automobile manufacturing throughout all classes is critically hampered as a result of Coronavirus Outbreak that originated in China. Many automakers in India import about 10 per cent of their uncooked supplies from the neighbouring nation, as per auto trade physique SIAM.

Since manufacturing of most crops in China and South Korea has been seized for indefinite interval, Indian auto trade is going through it tough to take care of a listing. This, mixed with the demand constraint attributable to BS-VI emission norms has created a ripple impact for the trade, which is unlikely to bounce again anytime quickly.

“Manufacturers are exploring alternatives to fulfil their supply chain demands but that would also take a substantial amount of time to reach stable production scale as these components would need regulatory testing,” mentioned SIAM President Ranjan Wadhera in a press release.

Society of Indian Automobile Manufacturers (SIAM) has been in contact with the federal government with particular suggestions on behalf of the auto trade, he added.

While sellers throughout India had been struggling to clear the shares of older BS-IV automobiles for whom registration will shut publish 31st March, 2020, they’re now struggling to get the availability of BS-VI automobiles. Not simply weakened provide of latest BS-VI automobiles, coronavirus can be maintaining patrons away from showrooms, and car sellers concern that they might not be capable of liquidate the BS-IV stock earlier than the month-end deadline.

According to car sellers’ physique Federation of Automobile Dealers Associations (FADA), issues began to look underneath management until February-end till Coronavirus outbreak pushed the patrons away.

FADA additionally mentioned that banks got here out with notices that they might not finance BS-IV inventory after particular dates in March, additional impacting the boldness of the sellers and prospects. “So, lot many things have come together and, now, suddenly there is fear among dealers that they won’t be able to liquidate the BS-IV stock. At the start of March, we were reasonably confident that the problem of leftover stock would not be much,” FADA President Ashish Harsharaj Kale advised PTI.

FADA has acquired assist from few states the place banks have agreed to proceed finance for BS-IV items until the March-end. “We have received some support from states like Punjab, West Bengal and Chhattisgarh. They have assured that they will open even on the weekends to clear the registration process,” he added.

FADA now seeks authorized treatment to clear the BS-IV shares as Coronavirus has come into play. Earlier, Supreme Court dominated out any extension of the final date of BS-IV automobile registration within the nation. But since new elements have pushed the shoppers away, FADA hopes for an extension from the highest court docket.

These are the one two choices obtainable with FADA proper now, Kale mentioned. “We will discuss with OEMs how do we do it (sell vehicles)? Should we bring in better schemes or the OEMs take the stock back and liquidate it somewhere else,” Kale mentioned.

If nothing works in favour of FADA/ Dealerships, any unsold BS-IV automobile would find yourself as scrap after March 31 as from April 1, solely BS-VI-compliant automobiles shall be registered within the nation. This will lead to big loss for the dealerships throughout nation.

With Inputs from PTI