Indian automakers have warned that total car sales could drop 45% in the current fiscal year in the worst case as economic growth collapses due to the COVID pandemic- 19, and They ask the government for help during the crisis.
The Society of Indian Automobile Manufacturers (SIAM), a trade body in the industry, told government officials last week that if the Indian economy shrank by 2% over the year Beginning on April 1, sales of cars, trucks and motorcycles could decrease by up to 45% compared to the previous year.
SIAM has presented two other scenarios to the government: one where the economy grows between 2% and 3%, which would lead to a 20% drop in car sales, and another where growth stagnates compared to the economy. last year, resulting in a 35% decrease in sales.
The trading body represents the majority of major Indian automakers, including Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hero MotoCorp and local units of Toyota Motor, Hyundai Motor, Ford and Volkswagen.
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Global consulting firm McKinsey & Co estimated in April that if the closure of India continues until mid-May, the economy could contract by 2 to 3% over the course of. the current fiscal year, while rating agency Moody's stated on Friday, the country could experience growth of 0%.
India's auto industry is already picking up, with sales of cars, SUVs, trucks and motorcycles falling 18% in the previous year to 21.5 million vehicles due to an economic downturn. The pandemic, which has caused the closure of businesses and people who are asked to stay at home in the world, will make matters worse.
If the combined decline in two years is 40% to 45%, it could bring car sales to their lowest level in a decade, SIAM President Rajan Wadhera told Ministry of Road Transport officials. , according to the recording of a web conference they held last week. .
During the meeting, the leaders of the automotive industry called for tax cuts, a delay of one year in the implementation of certain regulations on energy efficiency and security, and low-interest loans to help the industry jumpstart production and avoid layoffs until sales and profits resume.
"The biggest problem we are facing right now is the liquidity of cash flows," said Pawan Goenka, managing director of Mahindra & Mahindra, former president of SIAM, at the meeting.
Almost all automakers posted zero national sales in April after the government imposed a national blockade on March 25 to control the spread of the coronavirus. Since May 4, it has allowed a resumption of economic activity where there are no or few cases of infected people.
While a handful of companies like Maruti and Hyundai are planning or have restarted production, many automakers are still waiting for supply chain disruptions and demand signs to be resolved before they start to manufacture.
(This story has not been edited by NDTV staff and is automatically generated from a syndicated feed.)
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