The state of Maharashtra is one of the leading automotive manufacturing hubs and home to the financial capital of the country. The state is currently witnessing the second wave of the pandemic and announced the second lockdown on April 5, which has impacted industrial recovery for many sectors including automotive.
The commercial vehicle sector and the barometer of the country’s economy, which was already reeling under the economic slowdown since the past two years, will feel the heat of the lockdown. The skyhigh prices of diesel are not helping the trucking business either.
Speaking to Autocar Professional, Bal Malkit Singh, chairman-core committee and former president, All India Motor Transport Congress (AIMTC), says, “The trucking industry was already fighting hard to come back to its feet since last year and we had just reached around 70-80 percent of capacity utilisation, and now it is back to 40-50 percent. The trucks that are plying are mainly serving the essential services (fruits, vegetables, FMCG, pharma), but in terms of industrial goods, the demand is expected to go down as the activities stop. And, as a result, it will have a significant impact on our industry.”
“In this scenario, we are estimating that the losses for the industry to be around Rs 315 crore per day only in Maharashtra. You also have to understand that the trucking industry is the one who pays taxes in advance – be it road taxes, annual tax, fitness and insurance among others. When one accounts for all these factors, it has a significant impact on our working capital. It will also make it difficult for truckers to pay their EMIs. It is estimated that each truck provides livelihood and supports four families (trucker, driver, cleaner and mechanic). What we foresee is the fact that it will be difficult for us to manage our cash flows, working capital, how will we manage to pay salaries to the drivers, staff, extended family members such as accounts, loading staff,” concluded Singh.
With the impact of Covid-19 also compelling other states like Delhi and Punjab, among other states to implement lockdowns, the trickle-down effect from the trucking segment may hamper the mood for India Auto Inc, which was just about beginning to improve.