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With the rapid increase in Covid-19 cases in India and localized lockdowns to curb its spread, many automakers have been forced to shut down their manufacturing plants.
The latest to do so is Honda Cars India, the Indian unit of the Japanese auto major, which has announced that it was advancing its maintenance shutdown. Its production unit at Tapukara in Rajasthan state will remain closed from May 7-18, Press Trust of India reports.
This shutdown was scheduled for mid-May but has been advanced by around 10 days as the country battles the second wave of Covid-19. Those employed in the automaker’s corporate and zonal offices are already working from home.
Earlier, the country’s leading carmaker Maruti Suzuki had advanced its scheduled maintenance shutdown by a month and announced closure of its plants in Gurugram and Manesar, near New Delhi, from May 1-9. These plants were supposed to close down in June.
SUV maker Mahindra & Mahindra has also advanced its annual maintenance plant shutdown. Others like Toyota and MG Motor India have also announced temporary suspension of manufacturing activities. Two-wheeler makers Honda Motorcycle and Scooter India and Hero MotoCorp have also suspended productions at their plants.
Reducing inventory
With states like Maharashtra, Karnataka, Delhi, Punjab and others having announced lockdowns, dealer outlets in major cities like Delhi, Mumbai and Bangalore will remain closed. In other regions, too, the customers will be reluctant to visit showrooms for fear of contracting the virus.
With sales expected to fall in May, the automakers are looking to reduce production in order to avoid an inventory pile-up. Moreover, they want to prevent their employees from contracting the virus. Thus, automobile companies are adopting a wait-and-watch approach till the pandemic eases out.
Oxygen availability
These closures are expected to free up the oxygen used by these units and their component makers so that it can be used in the healthcare sector. Hospitals in Delhi and many other places are facing an acute shortage of medical oxygen, which is needed to treat the critically ill Covid-19 patients.
Longer shutdowns?
However, market experts feel that these planned shutdowns may get extended if the second wave of Covid-19 becomes prolonged in various parts of the country. The states where elections were recently held may see a flareup in cases, as huge political gatherings were held with little regard to safety protocols such as social distancing and wearing of masks.
In another development, millions of Hindu devotees converged at the temple town of Haridwar in Uttarakhand state to attend Kumbh Mela, a religious gathering held every 12 years. The state is witnessing a spike in cases and health experts fear that many devotees returning home may be carrying the virus.
The Covid-19 second wave is mainly spreading among the middle class and the rural population, which were relatively unscathed during the first wave last year. Noted virologist and Fellow of the Royal Society Dr Gagandeep Kang expects the current surge to taper off by the end of this month.
India’s caseload since the pandemic began a year ago has crossed 21 million and over 230,000 people have lost their lives. Accordeing to health ministry data the daily new coronavirus cases hit a new high of 412,262 on Thursday and the death toll was 3,980.
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