Auto Industry Agrees With Extension; Looking To Resume Ops With Support

Auto Industry Agrees With Extension; Looking To Resume Ops With Support

Auto Industry ACMA FADA SMEV NRI Lockdown Extension
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The various stakeholders of the automotive industry are looking forward to resuming operations – even if partial, but are definitely expecting some form of Government funding for the same

The extension of the nationwide lockdown in India up to 3 May 2020 on grounds of curtailing the COVID-19 pandemic has been welcomed by the automotive industry at large. While the wider view of companies has been in agreement with the Government, in order to keep the health of employees as the top priority, businesses are also expecting it to support them financially or otherwise to help them back on their feet.

ANALYST VIEW

Ashim Sharma, Partner and Group Head – Business Performance Improvement (Auto, Engineering and Logistics), Nomura Research Institute Consulting and Solutions, said that with the extension of the lockdown, it is imperative to define guidelines for the controlled working of the automotive sector. This is one of the biggest employers both directly and indirectly on account of its contribution to about 50 % of the industrial GDP, he added. Sharma noted that this makes it necessary for the automotive sector to turn around some output to ensure the wheels of the economy begin to move.

Nomura Research Institute believes that steps including an in-plant stay of workers, revised SoPs for delivery and service of vehicles to ensure hygiene is imperative. Additionally, following guidelines on tracing and containment of goods and people in case of infections may well be ways to restart the industry, the analytical firm observed.

INDUSTRY BODIES’ POSITION

Meanwhile, the Automotive Component Manufacturers Association of India (ACMA) felt the guidelines issued by the Ministry of Home Affairs on measures to be adopted for containment of COVID-19 situations are comprehensive and detailed. Deepak Jain, President, ACMA, explained the industry body’s position on resuming operations in the auto component sector by saying it stands firmly by the government in this hour of crisis and would abide by its directive.

While stating that the health, safety, and welfare of employees are foremost on the mind of ACMA, Jain noted that the component body is in touch with OEMs, and resumption of operations would be aligned to them commencing operations on the directions from local authorities. The automotive value chain is a highly complex and integrated one, and nil revenues in the auto component industry in the lockdown period have deepened the state of crisis in the industry and several enterprises are staring at insolvency, he explained. “We urge the government for urgently infusing financial stimulus, based on our recommendations, to ensure that the industry has safe and sustainable operations post the lockdown,” Jain added.

On the other end of the automotive industry spectrum is the Federation of Automobile Dealers Associations of India (FADA) which looks into the welfare of the automotive dealership community. FADA and the entire auto dealer community stand in support of the lockdown extension. The President of FADA, Ashish Harsharaj Kale said that auto dealers look forward to India getting out of lockdown on 3 May, for business to resume. He noted that FADA is hopeful that in the near future the Government will announce a financial package for support to the business community during and post lockdown period while considering the dealer community’s list of requests.

The Society of Manufacturers of Electric Vehicles (SMEV) is the apex body for EV manufacturers in the country, which is headed by Sohinder Gill, who is the Director-General. Gill said that the extension of the lockdown is the right move looking at the current situation in the country. Though there will be an adverse impact on the operations for the next 1-2 months, it will enable the requirements to save thousands of lives and help India emerge as a healthier nation, he added. “This is a testing time for the EV industry, which is at the nascent stage, and I appeal to all the stakeholders to conserve cash, take care of our workmen and utilise this time to plan ahead. We are confident that the industry will be able to spring back into action to recover the losses due to this shutdown,” said Gill.

OEMs OPINIONS

Dr Pawan Munjal, Chairman, Hero MotoCorp, said the company supports the Central Government’s move to extend the lockdown till 3 May, with the topmost priority being the safety and wellbeing of citizens. The decision to allow graded relaxation and partial opening of certain areas after 20 April that show improvement is also welcome, he added. The company observed that while continuing to play its role in supporting the Government through various means and measures, Corporate India looks forward to a suitable stimulus package from the government that will give a boost to the economy.

Hero MotoCorp remains committed to extending its resources to support the Government and also safeguarding everyone in its larger ecosystem, including employees and their families, Munjal noted. He said that at a time like this, everyone has to scale up efforts and contributions manifold to also ensure the wellbeing of the most affected section of society.

On the other hand, Toyota Kirloskar Motor (TKM) is devising a comprehensive ‘Restart Manual’ as a guide for industries to follow post the lockdown withdrawal, with the possibility of the restart of manufacturing post 20 April. A team of cross-functional experts at TKM has worked on the minutest details of various operations and created a Standard Operating Procedure (SoP) to ensure the safest possible restart to manufacturing by securing workers from any health hazards. This manual is in consonance with the broad Government guidelines that have been issued and will be used by TKM, its suppliers and has also been shared as a reference document with all ACMA members. TKM also intends to share it with a wider segment of Industry through industry association platforms like CII.

This Restart Manual is an all-inclusive guide for reorganising and safely resuming business operations to near normalcy after the lockdown is lifted. This initiative will aid the Government, stakeholders and the community at large by creating detailed reference documents for industries to safeguard and ensure the health, well-being, and safety of all their employees, the company noted. We need to safeguard business continuity and economic recovery as well by ensuring the ‘Safety & health First’ approach, noted Masakazu Yoshimura, Managing Director, TKM. He said that in this perspective, this ‘Restart Manual’ is prepared for the benefit of government, industries, and stakeholders.

CONCLUSION

From the multiple views of parties representing the Indian automotive industry, it is clear that all stakeholders understand the dire situation under which the lockdown has been extended. In addition to their combined agreement to adhere to this extension, the industry is keen to restart operations with some form of Government aid to boost performance. The possibility of resuming partial operations post 20 April is also being looked at keenly by the entire manufacturing segment in the country, more so by the automotive sector.

TEXT: Naveen Arul