Lockdown impression: Automotive business suffered Rs 2,300 crore loss per day, says par panel

New Delhi: In the wake of the COVID-19 pandemic and subsequent lockdowns, the automotive business suffered Rs 2,300 loss crore per day and an estimated job loss within the sector was about 3.45 lakh, in keeping with a parliamentary panel report submitted to Rajya Sabha Chairman M Venkaiah Naidu on Tuesday.

The Parliamentary Standing Committee On Commerce, chaired by Telangana Rashtra Samithi (TRS) MP Keshav Rao, has additionally prompt a slew of measures for attracting funding within the automotive sector within the nation, together with overhauling of prevalent land and labour legal guidelines.

“The committee was knowledgeable by the auto business associations that each one the main unique gear producers (OEM) have cut down their production by 18-20 per cent due to low demand and decline in sales of vehicles. As a result, the employment scenario in the automobile sector has been affected and an estimated job loss in the auto sector at 3.45 lakh,” the panel mentioned in its report.

Hiring of manpower has been stopped within the auto business sector. Besides that, 286 auto sellers have been closed. Further, manufacturing cuts within the car sector have a percolating destructive impression on the element business adversely affecting the Micro, Small and Medium Enterprises (MSME) engaged within the car spare elements manufacturing, the report states.

“As informed by the Automobile Industry Associations, the production stoppage at the automotive OEM and component supplier due to the COVID-19 pandemic and subsequent lockdowns led to a loss of approximately Rs 2,300 crore per day to the automotive sector,” in keeping with the report.

The standing committee additional mentioned the precise magnitude of the impression is determined by the length of lockdown interval, the depth and extent of unfold of the COVID-19 outbreak.

Considering the disaster, it’s predicted that the car business is prone to undergo at the very least two consecutive years of extreme contraction, resulting in low ranges of capability utilisation, lack of future CAPEX funding, excessive danger of chapter and job losses throughout the whole automotive worth chain, the committee mentioned.