A solemn first for the Indian car industry as the lockdown kept all production and sales on hold
The entire country has been under lockdown since March 23 due to the global coronavirus pandemic. As a result, people are not allowed to leave home for non-essential activities and manufacturing facilities have remained shut for all of April. In a first for the Indian car industry, no manufacturer reported any sales the entire month.
The President of Federation of Automobile Dealers Associations of India (FADA), Ashish Harsharaj Kale, referred to April as a “month which the entire automobile industry would like to forget”. The halting of usual economic activities will likely have a crippling effect on various industries including the automotive sector.
In his statement, Kale states the lockdown’s ripple effect extends from auto sales to connected sectors including insurance, banking, service, component sales, oils and rubber. He emphasises that the entire automotive ecosystem of businesses needs to be allowed to resume operations, once safe to do so, and leaving out any of the participants under lockdown restrictions won’t allow the interdependent system to function.
At the core of his statement, the President of FADA once again raises the topic of government support for the industry to get back on track post the lockdown. He reiterates previously stated suggestions and requests to resurrect automotive demand such as a temporary cut in GST rates or reducing interest rates for banks and NBFCs. The introduction of an incentivised scrappage policy is also on the list of suggestions for the government along with extending the depreciation benefits scheme till March 2021.
India is currently under a limited lockdown until May 17 wherein areas with few to no coronavirus cases are slowly being allowed to resume business operations. Most big cities are still labelled as hotspots due to the number of cases detected which means many businesses are likely to continue working in limited capacity till July 2020.
Source :- CarDekho.com