The component industry could lose revenue upto Rs.1,000-1,200 crores due to production losses
The Automotive Component Manufacturers Association (ACMA) has sought Government of India intervention to protect the component industry in view of the outbreak of the coronavirus pandemic. Every automaker in the country has shut down plants and production is at a complete standstill while there is no knowing when the situation will improve.
The COVID-19 outbreak is set to have a devastating effect on the automobile sector which has already been facing constraints over the past 18 months. The industry faced constraints not only with falling sales but had also to deal with added costs in the transition from BS4 to BS6 emission standards. These difficulties apart, now the coronavirus pandemic will also throw the industry into further turmoil.
The COVID-19 pandemic will encompass not only the automakers but will also take down the auto component industry. It is in view of these constraints that ACMA has appealed to for assistance. Mr. Deepak Jain, President ACMA, has requested the government to help this sector with relaxation of borrowing norms and statutory payments, extensions of moratorium on payment and interest of loans for a year and has also sought the support of SIAM and OEMs to ensure minimum disruption in the supply chain.
ACMA has put forth a list of requests which also include relaxation of fixed electricity charges for a year, relaxation of levy demurrage charges for at least 7 days for import cargo clearance.
Along with this, ACMA has also created a taskforce for the manufacture of facemasks and hand sanitizers following interest shown by many component makers and the industry is seeking Government guidance on ways, means and standards to produce such equipment.
ACMA has also issued an advisory to all its members in terms of safety and security to combat the coronavirus. They have assured that there will be no layoffs or salary cuts, for the month of March. Medical aid will be extended to all employees and contractual workers if either they or their family members happen to contract this virus. Community kitchens have been set up and social distancing is being practiced so as to ensure that all employees get regular food.
The Indian auto component sector contributes 2.3 percent to the country’s National GDP and 25 percent to manufacturing GDP and offers employment to over 50 lakh persons.