Coronavirus Pandemic: Auto Industry Production & Operations To Remain Shut During Lockdown Period

The Ministry of Home Affairs of India has recently issued a notice, including a list of new activities which will be allowed post the 20th of April 2020. This notification comes a day after the Prime Minister of India, Narendra Modi announced an extension in the lockdown period up to 3rd of May.

According to previous reports, the auto industry was meant to be a part of the new list. However, this did not happen, which means that vehicle manufacturers will not be allowed to resume operations even at a smaller scale, until the end of the lockdown period.

The Ministry of Commerce had sent out a letter to the Home Affairs Ministry to expand the list of allowed activities as well. They had requested large scale industries like the auto sector to also be included in the list. However, the Home Affairs Ministry has decided not to include the auto industry in the list as of now.

Initially, the proposal was to allow the auto industry to restart operations at 20 - 25% of their capacity. The proposal also indicated the vehicle manufacturers would work just a single shift while ensuring all safety measures and social distancing regulations are met — here is the initial proposal.

The auto industry stopped its entire operations almost a month ago. SIAM (Society Of Automobile Manufacturers) stated that for each day of the lockdown costs the auto sector a loss of Rs 2300 crore.

Another worry arising from the extended lockdown period is the unsold BS4 stock at company dealerships across India. Initially, the Supreme Court had announced a 10-day relaxation period post lockdown between 14th of April to 24th of April 2020 to sell 10% of the remaining BS4 stock.

However, now with the lockdown period further extended till the 3rd of May, the window to sell the BS4 stock has also deferred. The decision now stands that company dealerships will be able to sell their leftover bs4 stock between 4th of May to the 13th of May. Although this again depends on whether India will witness another extension in lockdown or not — here are more details.

Thoughts On The Auto Industry Shut Down Being Extended Until End Of Lockdown

The shutdown of all operations in the auto sector has already caused a massive blow to the industry. Now, with the extension of the lockdown period, things are expected to get even worse.