Covid-19 Pandemic – India’s Auto Industry Hits Break on Manufacturing

05 May 2020
India Export Data of Auto

The lockdown in India, in order to curb the spread of the Coronavirus leads to worries of car and component makers. The closure of manufacturing plants by various automakers and component manufacturers due to covid-19 pandemic has put serious impact on India’s automotive industry. According to Export Genius market research experts, India’s auto sector likely to witness revenue loss of over Rs 2,300 crore per day due to plant closure of Auto OEMs & Components.


A three-week shut down of the automotive industry will translate into a revenue loss of Rs 48,300 crore, according to Society of Indian Automobile Manufacturers (SIAM). All major automakers including Hyundai, Maruti Suzuki, Mahindra, Toyota Kirloskar Motor, Kia Motors, Tata Motors and MG Motor India have announced a temporary shutdown of plants. Similarly, two-wheeler manufacturers like Honda Motorcycle and Scooter India, Hero MotoCorp, TVS Motor Company, Yamaha, Bajaj Auto and Suzuki Motorcycle have also suspended production.


The components industries like Kalyani Brakes, Bharat Forge, Lumax and Subros also stopped production. In a statement, Bosch India said that the company was looking at laying off workforce amid the automotive sales slowdown over the past year. There are over 1,000 MSMEs in the Gurugram-Manesar belt itself and if you consider the automotive manufacturing hubs in Rajasthan, Andhra Pradesh, Maharashtra and Tamil Nadu, the extent of damage done by Coronavirus lockdown could only be estimated.


India’s Exports of Vehicles, Auto Components Under 2-Digit Level HS Code

According to India export data, automotive products come under Harmonized System HS Code 87 with product description – vehicles other than railway or tramway rolling stock and parts & accessories. At 2-digit level HS Code, India’s exports of vehicles including auto products valued US$ 18,238 million in 2018, up from 2017’s US$ 16,226 million. Have a look at exports of vehicles and related goods from India in the last 5 years. 

Year

Value US$ Million

2014

14,481

2015

14,081

2016

14,988

2017

16,226

2018

18,238

 


Main Export Destinations of India’s Auto Goods


India export statistics of vehicles show that India shipped vehicles and other auto goods the most to the United States, followed by Mexico and Bangladesh. The U.S. shared 15.6% value to total auto exports. See list of top 10 export destinations of India’s auto goods at 2-digit level HS Code.

Country

Value US$ %

United States

15.6

Mexico

9.4

Bangladesh

6.3

South Africa

4.6

Nepal

4.0

Indonesia

3.4

Sri Lanka

2.7

Germany

2.5

Nigeria

2.5

United Kingdom

2.4

 

Another report released by the ETAuto on automotive industry impact by covid-19, the Indian auto sector earns gross revenue of around Rs 2,000 crore each day and shutting down the production due to lockdown by the manufacturers for the next 10 days or so will result in a revenue loss of up to Rs 15,000 per day, whereas the annual business of the sector stands at Rs 7.8 lakh crore. In addition, the auto industry also contributes around 7.5% to India’s overall GDP, which accounts for 49% of its manufacturing sector. However, the estimated loss can be recovered, once production resumes and the manufacturers are willing to ramp up the production and increase the capacity utilization.


Till date, more than 2,000 coronavirus cases with about hundred deaths have been reported in India. Globally, thousands death and lakhs of cases have been reported, with the United States, Spain, Italy, Iran and France are worst affected by the virus.


With no clear sight of the endgame, it is advisable to stay indoors and observe social distancing unless there is an absolute emergency, because that is the only way to stem the spread of coronavirus and hence to recover sooner as a nation.

 

Is this article helpful. Share with others!   

Add Comments


 
To Get Quick Response
Request a Demo close modal