Coronavirus will leave behind a global recession: Anand Mahindra

by Autocar Pro News Desk , 21 Mar 2020

The rapid global spread of the coronavirus is having a major impact on all aspects of society, including the automotive industry. Production facilities are being closed around the world, the dramatic stock market falls have hit the value of virtually every automaker as well as component supplier, vehicle sales are dropping dramatically and most major industry as well as motorsport events have been cancelled. And news of companies taking decision action to protect their employees filters in virtually every couple of hours.

Autocar Professional has been providing a constantly updated report of how the automotive industry, particularly the passenger vehicle and two-wheeler industry in India, is being impacted. The Indian automotive industry, which is transitioning to BS VI emission norms and is also experiencing a downturn, the likes of which it has not seen for a long time, is expected to continue in slow lane for most of 2020. Automakers the world over will be preparing contingency plans, deferring investments and going slow on expansion programmes.

Now,  Anand Mahindra, Chairman of Mahindra Group, who is a keen observer of industry, Indian and global, across sectors has made an incisive comment on the colossal adverse impact of the Coronavirus in a series of tweets, detailed as under:

"The virus will eventually be conquered, but it will have left behind a global recession. The costs of that are incalculably high at this time. The most fearsome toll will be on small businesses, the self-employed & those whose lives depend on meagre daily wages.'

"Apart from the toll on lives, the legacy of COVID-19 may well be deaths due to stress, loss of livelhoods, a rise in homelessness & in extreme situations, civil unrest. The only global experience that has lessons for us in the current situation is the last world war."

"In the aftermath of WW2, the U.S came up with the Marshall plan to revive Europe, effectively a giant fiscal pump-priming. In the U.S, the govt. dramatically dismantled regulations & opened up the economy to trade. These actions led to a boom-cycle that stretched to 1975."

"This time, there will be no victors, only the vanquished. So every country will have to create its own Post ‘VirusWar” Marshall plan & take care of those in society who are hit the hardest. Perhaps we too can build the foundations of a sustained global growth cycle."

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