The lockdown in Maharashtra is set to take a hard hit at the consumer industries such as automobiles, durables and appliances. The state contributes nearly 15 to 20% to overall sales in the automobile, while for appliances, the share is around 10%.
Top companies, including Tata Motors, Bajaj Auto, Mercedes-Benz, LG Electronics, Mahindra & Mahindra, Jeep, Whirlpool, Volkswagen and Skoda have production houses in Maharashtra. Senior officials at the companies told ToI that the lockdown is likely to hit both production and sales.
Vinnie Mehta, director-general of auto component makers body ACMA, said they are seeking clarity on whether they can continue industrial activity under safety protocols and mandates, or whether it also comes to a grinding halt. Santosh Iyer, VP (Sales & Marketing) at Mercedes-Benz India, said business will be hit as retail showrooms in the state will be shit. “There is still no clarity on movement of goods or supply of parts.”
Meanwhile, LG Electronics is troubled as its Pune factory is the sole manufacturing base for TVs and products such as ACs, washing machines and refrigerators are also manufactured at Noida in Uttar Pradesh, and will still production.
The report highlights that 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. Analysts have also raised concerns that a curb on production in Maharashtra has the potential to have a spiralling effect on industries and companies outside the state. They pointed out that many ancillary suppliers are sole vendors to many top companies that have factories outside the state.
SIAM, the automobile manufacturers body, has been in discussions with the ministers and bureaucracy in Maharashtra. Rajesh Menon, SIAM director-general, said the discussions happened almost throughout the day and they need clarity on production schedules and movement of finished goods as well as raw materials. “We are seeking clarity on the matter.”