Reduction of new investment in auto companies

Posted on 15th Jul 2020 by rohit kumar

After the Covid epidemic, there may be new investment and jobs in the country's automobile sector. Vehicle makers' organization Sayam said today that companies in the region may take a long time to recover from the epidemic and subsequent nationwide shutdown. Vehicle companies and component manufacturers contribute 7 percent to the country's total gross domestic product (GDP).

 

Sayan President Rajan Vadhera said, "At the end of FY 2021, vehicle sales will be only 50 percent compared to 2018 sales. Companies may take at least 3-4 years to reach the 2018 figures. The government has not announced any incentives for the automobile sector, which may improve the situation by the end of 2023. ' Vadhera said that the possibility of jobs in the automobile industry due to the Covid-19 epidemic cannot be ruled out. He said, "When companies are constantly troubled by sluggish business, they will find a way to reduce costs and a reduction in workforce will also be away."

 

By the end of the current financial year, domestic sales in various vehicle categories will decline by 26 to 45 percent due to the pandemic due to the epidemic, according to Siam. Commercial vehicle sales will suffer the most. Senior officials of the auto industry say that due to the shortage of labor and guidelines to keep people-to-people contact to a minimum, the reduction in demand and bottlenecks related to supply mechanism will affect the production of vehicles. In this regard, an official said that this time the demand has reduced by 40-50 percent as compared to April-June last year.

 

According to Vadhera, the production plants of automobile companies are open, but the work goes on and off sometimes. There have been reports of Maruti and Hyundai companies getting infected with Covid-19 after their production plants opened. However, according to people associated with the auto industry, the further picture may be better if sales and demand for two-wheelers and tractors in rural areas are strong. Mahindra & Mahindra said that this month was the best in the history of the company.

 

Tarun Garg, director (sales, marketing, and service) at Hyundai India, said that sales will improve by 90 percent in July compared to 2019. Garg said, "Retail sales reached 75 percent in June compared to last year and in July this figure for the previous year

 

The comparison is expected to reach 90–100 percent. I think this is a positive sign and shows the strength of the country's automobile industry. '

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