NEW DELHI: Prime Minister Narendra Modi’s decision to extend the nationwide lockdown till May 3 to bring the coronavirus (COVID-19) spread under control is likely to give the crisis-hit auto sector an unprecedented loss, sector analysts feel.
Production and sales are likely to remain suspended for the next 19 days, as many feel the government’s assurance to provide relief in essential services from April 20 in virus-free areas may not include opening of showrooms and factories.
"The government should have allowed us to restart manufacturing activities with limited capacity in least sensitive areas. Many industry bodies have written to the government (assuring of) maintaining social distance and hygiene norms. The economic impact from this 40-day lockdown will break most of our suppliers and take away jobs of many people," said a senior executive at a leading car company, requesting not be named.
Bajaj Auto chief Rajiv Bajaj had previously argued that the ongoing lockdown may hurt the economy rather than helping it. According to the Society of Indian Automobile Manufacturers, the industry is losing Rs 2,300 crore in revenue everyday due to production shutdown.
The Federation of Automobile Dealers Association (FADA) too had recently written to the government regarding the closure of showrooms and declining jobs. "Auto dealers look forward to India getting out of lockdown on May 3 for business to resume. FADA is hopeful that in near future, the Centre will surely announce a financial package for support to the business community during and post-lockdown period," FADA president Ashish Harsharaj Kale said on Tuesday.
Naveen Soni, senior vice-president (sales and service), Toyota Kirloskar Motor, said, "It goes without saying that Indian economy will take a substantial hit, but given the resilience we have shown during the previous global economic crisis, and the strong fundamentals, we can expect a quicker rebound."