The automotive industry has written to the government seeking relaxations from lockdown 3.0. After clocking zero sales in the month of April, the entire industry has come to a standstill.
Various associations of the auto industry have written to the government to provide them with certain relaxations in the Lockdown. Seeing, the sales numbers recorded and to recover from the slump, the automotive industry took this step.
The government on Friday had announced the extension of the lockdown till 17th May. However, amidst the lockdown, the government had provided some relief to select businesses in the country. The auto industry has demanded complete relaxation for the entire supply chain, ranging from the spare parts manufacturers to dealerships.
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What Does The Automotive Industry Want?
The $120 billion automotive industry of the country has been going through some tough times in this era. According to Society of Indian Automobile Manufacturers (SIAM), the industry is experiencing a loss of ₹2,300 crores daily. However, its not just the automotive giants, experiencing losses. No sales in the automotive industry are also hampering the government kitty. The sector accounts for 15 per cent of GST as well as state levies.
The letter is written to Home Secretary, Ajay Bhalla by SIAM, ACMA and FADA. The three bodies have mentioned how the entire value chain of the automotive industry is complex. It explains the integrated approach of automotive manufacturing in the letter.
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The letter also throws light on the employment aspect. The industry employs more than 3,7 crore people, directly or indirectly. Hence, the three automotive bodies have been requesting the government to provide relaxations to the entire supply chain involved during the lockdown stage.
“Further production for a vehicle manufacturer would amount to adding to inventory and blocking working capital in case dealers are unable to sell vehicles. If any element in any segment does not commence operations, the value chain will not be able to re-start.” The letter continues on to say this.
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