Auto manufacturing is NOT allowed under the list of allowable services post April 20th in India

The Indian Auto Industry has been struggling since a year, and now the lockdown has further complicated matters for them. An imminent auto recession seems to be staring at the Indian Auto Industry, as the sales numbers this year have been dwindling, and just a month back, the Indian Automakers recorded their worst slump ever with a 51% drop in comparison to sales made in March 2019.

The lockdown has been imposed upon the country since 24th March, and since then, all the industries within the country have temporarily suspended operations in order to help curb the spread of the highly communicable Coronavirus. It was initially proposed by the Indian Government that the lockdown would last from the 24th of March, to the 15th of April, after which either the lockdown will be stopped or certain sectors of the industry’s would have a staggered opening.

However, the day before, the Prime Minister while giving his speech, announced that the lock down will be extended until the 3rd of May. Furthermore he also spoke about a few industry’s which will be allowed to function post the 20th of April. His speech was divided and explained with more detail in the set of guidelines that has been put out by the Ministry. According to the guidelines, amongst the industry’s which will begin working again after the 20th, the Auto Industry of India has not found a place in this list and frankly, this is deplorable.

The Indian Auto Industry accounts for more than 7% of the country’s total Gross Domestic Product and this kind of callous handling of the situation is very disappointing. I understand that the Covid 19 crisis requires certain steps and precautions to be observed and I am in favour of that, but what I do not understand is, how do other sectors of the industry get to reinstate production, while the Indian Auto Industry continues to stagnate.

By not allowing the Auto Industry to restart production, the Auto Industry is suffering loses of 2300 crores a day. It will take a long time to recover an amount of money as massive as this, and the more time the Government takes on determining the fate of the Auto Industry, the deeper will be the hole where the Auto Industry currently finds itself.

The Ministry of Commerce had actually recommended the Government to allow the Auto Industry to initiate operations in a staggered way, which would result in the Automakers working on a single shift basis with a working capacity of about 20/25 % of the total staff. Had the Ministry approved this recommendation, the inclusion of the Auto Industry would have helped improve an already wounded economy. However, the Ministry of Home Affairs chose to not include the Auto Industry, and this is going to make life difficult for the Automakers.

The Supreme Court had extended the deadline and added 10 days, during which the Automakers would be allowed to sell their BS4 stock, but this extension had been made keeping 15th of April in mind. Now, with the lockdown being increased till the 3rd of May, the motor brands will have to continue waiting with their BS4 stock until the lockdown is lifted.

In all, the Auto Industry slowdown from last year, plus the BS4 – BS6 transition and now the lockdown, these 3 together have made life a nightmare for the Indian Automakers, and the Government at this point does not look very keen on helping them come out of this situation.

The Indian automakers are coming up with creative ideas and strategies which could help them attain some sales, and at times like these, even these little sales could help keep them afloat, barely afloat though.

2020 would have been the year for autobrands to launch new products, new technologies but everything has gone south on them since the pandemic has struck them. I really hope that the Government reconsiders their stance on the Auto Industry, and comes up with ways to either help them, or include them into the list of industry’s which will function post the 20th of April.