NEW DELHI: The top management of Apollo Tyres has decided to take a salary cut of up to 25 per cent in the wake of COVID-19 outbreak hampering the demand in an already muted automotive market.
“We are experiencing slowing demand and disrupted supply chains due to COVID-19. We are working on further measures, which we will provide updates on, as we make final decisions,” said the company’s promoter.
Onkar Kanwar, CMD and his son Neeraj Kanwar, vice chairman and MD, have decided to take the maximum 25 per cent cut in their salaries, while other top executives will take a 15 per cent pay cut. The father-son duo are one of the highest paid executives in the country.
“This is an incredibly difficult time for our employees and their families. We are in unchartered waters but as ‘one family’ we will work together and make the necessary sacrifices to steer Apollo Tyres in the right direction, to overcome this period,” said Onkar Kanwar.
Without specifying the quantum of impact the company is facing because of the pandemic, it said the worst was yet to come. Unlike Europe and the US, no plant has shut its door in India to limit the spread of virus.
Many industry experts feel that more companies in the automobile sector would be forced to take a similar step as the demand has been in negative for nearly 20 months and the latest Coronavirus outbreak is going to have a deep financial impact on the sector.
“The outbreak has resulted in sharp decline in dealership footfall across the country. It has already obstructed the smooth BS-VI transition and in all possibilities many OEMs will be left with BS-IV inventory. They can look at cost cutting measures such as pay cut to reduce the financial burden,” said a senior executive of a two-wheeler firm.
Hero MotoCorp approached the SC seeking a 3-month extension of the March 31 deadline for selling BS-IV compliant vehicles.
“In view of the completely unforeseen developments that have arisen out of the prevailing force majeure situation on account of COVID-19, we have prayed for an extension of time for a period of 3 months..” it said.