Auto industry output set to hit a 9-month low in May – The Economic Times

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The total auto industry output this month is likely to be 1.2-1.5 million vehicles – almost half of the original plan, industry insiders said.

Production in the Indian auto industry is set to hit a nine-month low in May as factories are getting shut and the supply chain is fractured amid a surge in Covid-19 infection across the country and partial lockdowns in several places.

More than half a dozen vehicle makers includingMaruti SuzukiHyundai Motor India,Mahindra& Mahindra, Toyota Kirloskar,Hero MotoCorp, Honda Motorcycle, andAshok Leylandhave advanced maintenance shutdown to break the chain of infection.

South Korean carmaker Hyundai on Tuesday became the latest vehicle maker to intimate vendors of a shut down from May 10 to 15.

Auto Industry Output Set to Hit a 9-Month Low in May

The total auto industry output this month is likely to be 1.2-1.5 million vehicles – almost half of the original plan, industry insiders said.

With about half of the retail stores also shut, sales are likely to fall to a 6-9 months low, they said.

Indian automakers had produced nearly 2.5 million vehicles in March 2021, of which 81% was two-wheelers, 14% passenger cars, and the remaining 5% commercial vehicles and three-wheelers.

The tentative production plans carmakers shared with vendors suggest that they are planning to produce 180,000-200,000 units this month, down from 320,000 units in March. This would be the lowest in nine months. Passenger vehicle makers had sold nearly 297,000 units on an average in a month in the second half of FY21.
A vendor of a leading carmaker said the company’s plans are fluid and a ramp-up of production will entirely hinge on caseloads of coronavirus on May 9 and May 10 as well as availability of industrial gases for production of vehicles and their parts.

Cryogenic tankers used to transport nitrogen, argon and other industrial gases are now being used for ferrying medical oxygen from plants to various states as hospitals across cities face a shortage of the life-saving gas.

If Covid-19 cases continue to be elevated with high demand of medical oxygen, vehicle makers may extend the shutdown by a few more days, said the vendor cited earlier.

Automakers have issued advisory for opening of plants from the second week of May and they have called workers two-days before the scheduled planting opening data to ensure adequate testing and preparation of adequate quarantine facilities.

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