Automakers likely to get green signal to resume production

by Nikhil Bhatia 13 Apr 2020

In what could be baby steps towards normalcy amidst the coronavirus-related lockdown, certain industries, including auto manufacturing, could be allowed to resume operations soon. The Ministry of Commerce has written to the Ministry of Home Affairs in this regard with suggestions to widen the scope of activities allowed within the lockdown.

In its letter, the Ministry of Commerce deemed the activities “essential to improve the economic activity (sic) and provide liquidity in the hands of the people”. At present, only essential services and industries involved in continuous production such as power generation are exempt from the lockdown.

The Ministry of Commerce proposes big industries such as automotive manufacturing could commence operations with 20-25 percent capacity in a single shift. All industries will be required to adhere to social distancing norms and sanitisation requirements.

The suggestions come as a bit of a bright spot for the Indian auto industry that has had a horrid few months and has closed FY2020 with a sharp 18% decline year on year. The coronavirus-linked lockdown came amidst a continued sales slowdown and a race against time to sell BS IV stock. India’s auto makers ceased production over the month of March before the nationwide came into force on March 23, 2020.

Whenever it is that the domestic auto industry reopens, it sure won’t be business as usual.