With its major manufacturing plants being shut down, the automobile industry has been seriously jolted by Covid-19 outbreak. But it has reasons to hope…
Once the COVID-19 fears subside brands are going to see a consumer behaviour shift. Which means expectedly automobile brands would see a spike in the sale as people would be too scared to travel in public transport. The plants that are shut down, for now, can hope for better post-coronavirus business.
The COVID-19 pandemic has been spreading at an alarming rate worldwide. With the virus reaching the second stage in India, the nation as a whole is standing up to fight the pandemic. The recent member to join the coronavirus fight is the Indian automobile industry. One of the largest employers of skilled workers in the country, the Indian automobile manufacturers have gone into complete lockdown. Many of the automobile manufacturing units in Indian have shut down their facilities. These manufacturing plants are expected to remain shut indefinitely until any further government notice.
Highlights! The coronavirus pandemic has severely hit the Indian and global automobile industry.
- BMW, Toyota and Ford have shut production globally amidst coronavirus lockdown.
- The automobile sales have hit an all-time low following the COVID-19 pandemic.
- Almost all OEMs and MSMEs in India have halted production and shut down their manufacturing units.
Coronavirus grips the global automobile industry
The Indian automobile industry is not the only one to be affected by the coronavirus pandemic. The coronavirus outbreak has already gripped the global automobile sector at large. Automobile industries in Europe and North America have shut down their manufacturing units. The Western automobile industry soon followed the suite.
BMW, Honda and Toyota have temporarily shut down their UK factories due to the pandemic. On the other hand, Nissan and Vauxhall have closed plants owing to lesser sale.
“Due to the rapidly evolving coronavirus pandemic we have taken the difficult decision to cease production at our production sites at Oxford and Swindon for a period of four weeks until 17 April.” – An official BMW statement
North American giants Ford and General Motors have taken steps of shutting down their units after a Ford employee in Michigan was tested positive for the disease. Further, Elon Musk confirmed that Tesla factory in the US also halted its production. The pandemic has heavily dented the global automobile sector.
A ‘brake’ on automobile manufacturing in India
Amidst the need to maintain social distancing and avoid mass gathering, renowned Indian car and automobile heavyweights have decided to stop their production. Small and big, all sorts of automobile manufacturers have been engulfed by the COVID-19.
Mahindra and Tata Group halt production
Heading the Mahindra conglomerate, Anand Mahindra has ordered a temporary closure of operations across various sectors. The Mahindra Group has also offered to help the government through array of resources at its disposal.
Tata Motors has shut down its operations in India until 31st March as of now. However, this date is likely to be extended. Jaguar-Land-Rover, a subsidiary of Tata Motors, has already closed its operations in Europe. Despite the closure, the Tata Group has deiced to offer full salaries to its employees for the month of March and April.
Maruti Suzuki, Honda and Hero suspend production
Post the orders of the District Magistrate of Gurugram (Haryana), various automobile companies in the region have suspended their production. India’s largest seller of domestic four-wheelers, Maruti Suzuki has closed its manufacturing units in parts of the country. With no auto components at their disposal, Honda two-wheelers and Hero have closed the gates of its manufacturing units.
Hyundai, Ford and Volkswagen face complete lockdown
In Southern India, Hyundai, Ford, TVS and Royal Enfield have suspended their production indefinitely. Honda, Volkswagen and Fiat’s participation in the lockdown led to a closure of manufacturing operations in Maharashtra and Rajasthan. Various units supplying auto components have also closed production leading to a serious dip in the automobile sales in the country.
An estimated loss of 15,000 crores to the automobile industry
With millions of jobs at stake, the automobile shut down has put a big threat on an already low Indian economy. The shut down is expected to cause a loss of INR 15,000 crore to the Indian automobile sector.
While the big OEMs with huge capital might come out of this slowdown, it’s the MSMEs that will need support from the government to keep paying their employees. The coronavirus pandemic has indeed jolted the Indian and global automobile industry. But it still has hope.