As part of the mandate from the state government, the shuttered showrooms would mean no sales, while also increasing fixed costs.
The six-day lockdown announced in the national-capital from Monday 10 pm along with five other states including Maharashtra, Rajasthan, Madhya Pradesh, Uttar Pradesh (across five cities) and Chhattisgarh, is expected to impact 31 per cent of India’s passenger car market, as per a report published by ET Auto. Speaking with the executives of ET Auto, officials at Maruti Suzuki said that the current lockdown in 6 states will obviously affect the industry sales activities for almost 31 per cent. If it continues it will damage market sentiments. This can have a disproportionate and adverse impact on sales, especially on retails.
A Pune-based auto parts supplier said that production is hit as only a few people are working on the shop floor. As part of the mandate from the state government, the shuttered showrooms would mean no sales and increasing fixed costs. “It looks like this April also will be a washout like last year. Manufacturers are trying hard to maintain production levels but clearly they are hit. If retail stores are shut with no sales and if this continues for long just like last year, the production units will be forced to cut volumes,” a senior executive at a engine part supplier told ET Auto.
At the same time, Amit Garg, promoter of the Delhi NCR-based Shiva Motors, a leading dealership of Jaguar Land Rover, Mahindra and Mahindra Ltd (M&M) and Bajaj Auto Ltd said in a statement that showrooms in Delhi and workshops are closed from Tuesday. The showroom footfalls in the NCR had dropped suddenly. Imposing lockdown is not the solution. Providing proper medical facilities and adhering to COVID-19 guidelines such as social distancing is the way forward. He further added that lockdown will weaken the economy and the auto sector, which is yet to recover to normalcy.
According to a poll conducted by the Confederation of Indian Industry (CII), 75 per cent of the 710 chief executive officers (CEO) across different industries said that partial lockdown measures could impact the movement of labour and goods, which would affect industrial production significantly. Then, 56 per cent of the CEOs are concerned over loss of production of up to 50 per cent if there were restrictions on the ecosystem that supports the movement of goods.
Source: ET Auto