Main Indian carmakers not to resume production immediately after lockdown relaxation

Main Indian carmakers not to resume production immediately after lockdown relaxation

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Leading Indian passenger car manufacturers will not resume production after partial relaxations of lockdown restrictions on April 20 but will wait until May 3 for further clarity on various aspects of manufacturing operations, SteelOrbis has learned from various auto company officials.

The Indian government on April 15 announced relaxations of manufacturing norms in ‘green zones’ with no Covid-19 cases but subject to conditions that manufacturing plants adhere to social distancing norms, ensuring safety and accommodation of workers.

However, several leading auto companies said that, with dealer outlets and retail sales predominantly in urban areas still under strict lockdowns, resuming production will only result in mounting inventories.

According to an official at Hyundai India, retail sales are closed and companies are not sure how customers will return to dealer outlets and this will risk a cascading impact on new projects and production.

Mahindra and Mahindra officials said that the company has extended suspension of operations until May 3 when the second phase of the lockdown will end. They said that its plant in northern India met all government conditions for resuming operations, but its entire supply chain for components and assemblies were in the western part of India where lockdown restrictions are still in full force.

Tata Motors said that its plants could resume operations as they were located in green zones but a seamless supply chain could only be ensured when production was possible across all regions.

Volkswagen India officials said that their plants employed 5,000-6,000 workers including those of its vendors and it was not possible to provide accommodation for such large numbers.

The country’s largest passenger car maker in terms of market share said that it was still evaluating the situation as many of its vendors’ manufacturing plants are located in red zones with a high number of Covid-19 cases and it would still take two to three days before the company will be able to take a decision on resuming production or not.

source: SteelOrbis

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