Lockdown 2.0 in Maharashtra is set to hit hard consumer industries such as automobiles, durables and appliances, with significant manufacturing and sales coming out of the state.
Top companies have factories in the state, include Tata Motors, LG Electronics, Bajaj Auto, Mercedes-Benz, Mahindra & Mahindra, Whirlpool, Jeep, Volkswagen and Skoda, apart from a large number of component and ancillary suppliers across industry segments.
The state contributes nearly 15-20% to overall sales in the automobile industry, while for appliances, the share is around 10%. The lockdown is likely to hit both production and sales, top officials at companies told TOI, predicting a pan-India impact.
“We are seeking clarity on whether we can continue industrial activity under safety protocols and mandates, or whether it also comes to a grinding halt,” Vinnie Mehta, director-general of auto component makers body ACMA, said.
Some industry officials said there was still ambiguity on the matter and added that production will be allowed only for exports, defence or ambulances.
Santosh Iyer, VP (sales & marketing) at Mercedes-Benz India, said business will be hit, as retail showrooms in the state will be shut. “There is still no clarity on movement of goods or supply of parts.”
LG Electronics is worried as its Pune factory is the sole manufacturing base for TVs Products such as ACs, washing machines and refrigerators are also manufactured at Noida in Uttar Pradesh and thus may still see production.
Officials at companies like Mahindra & Mahindra, Tata Motors and the VW Group said they are seeking clarity on whether production can be carried out for supplies outside Maharashtra.
Another worry is censures on ancillary units which supply to companies outside the state. “A curb on production in Maharashtra has the potential to have a spiralling effect on industries and companies outside the state. Many ancillary suppliers are sole vendors to many top companies that have factories outside the state,” a top analyst said.
Automobile manufacturers body Siam is also seized of the matter and has been in discussions with the ministers and bureaucracy in Maharashtra.
“The discussions happened almost throughout the day and we need clarity on production schedules and movement of finished goods as well as raw materials. We are seeking clarity on the matter,” Siam director-general Rajesh Menon said.
Companies said sales will be hit during the crucial Gudi Padwa festive period. “Fingers are crossed and we are hoping that this lockdown does not go beyond this month, or sweeps to other states,” an official with a consumer durables company said. The Times of India