The Society of Indian Automobile Manufacturers (SIAM), an trade industry frame, advised govt officers final week that if India’s economic system contracts by way of 2% within the 12 months beginning April 1, gross sales of vehicles, vans and motorbikes may decline by way of up to 45% from a 12 months ahead of.
SIAM offered two extra situations to the federal government — one the place the economic system grows by way of 2%-3%, which might result in a 20% decline in auto gross sales, and a 2nd the place expansion stagnates from final 12 months, leading to a 35% decline in gross sales.
The industry frame represents maximum main automakers in India, together with Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hero MotoCorp and the native devices of Toyota Motor, Hyundai Motor, Ford and Volkswagen.
Global consultancy McKinsey & Co estimated in April that if India’s lockdown was once prolonged till mid-May, the economic system may shrink by way of 2%-3% within the present fiscal 12 months, whilst score company Moody’s mentioned on Friday the rustic may see 0% expansion.
India’s auto trade is already reeling, with gross sales of vehicles, SUVs, vans and motorbikes falling 18% final fiscal 12 months to 21.five million cars because of an financial slowdown. The pandemic, which has noticed companies shuttered and other folks advised to stick at house in all places the sector, is about to make issues worse.
If the blended decline over two years is 40%-45%, it might push auto gross sales numbers to their lowest stage in a decade, SIAM’s president Rajan Wadhera advised highway shipping ministry officers, in step with the recording of a internet convention they held final week.
During the assembly, auto trade executives sought tax cuts, a one-year extend in enforcing positive protection and gasoline potency laws, and loans at low rates of interest to assist the field revive manufacturing and save you layoffs till gross sales and revenues select up.
“The greatest downside we face at this time is cashflow liquidity,” Mahindra & Mahindra managing director Pawan Goenka, a former president of SIAM, mentioned throughout the assembly.
Nearly all automakers recorded 0 home gross sales in April after the federal government imposed a national lockdown on March 25 to keep watch over the unfold of the coronavirus. Since May 4, it has allowed some financial task to renew in puts the place there are 0 or few circumstances of other folks being inflamed.
While a handful of businesses like Maruti and Hyundai both plan to or have restarted manufacturing, many automakers are nonetheless looking ahead to provide chain disruptions to settle and indicators of call for to go back ahead of they begin production.