Auto industry's loss estimated at $2bn: Report
Hurt by the coronavirus pandemic, the auto industry may lose $2 billion in revenue in March alone as production takes a hit, according to a report by The Economic Times.
The industry has estimated a loss of 7.5 lakh units in production in March alone, the report said. This comes after many manufacturers have closed their factories temporarily amid a lockdown containing the spread of the novel coronavirus, aka COVID-19.
Many automakers told the publication that they would not fire permanent or temporary workers. The central government has asked companies not to cut staff's salaries for the duration of the lockdown.
Mahindra & Mahindra Managing Director Pawan Goenka told The Economic Times that almost everything would shut down in a few days.
“These are unusual times and we need to conserve cash, and Mahindra is looking at multiple ways to deal with the situation,” Goenka said.
Going by the pattern seen in China, Korea and other markets, at least one month of business will be impacted, he added.
“There will be a period of time when companies won't be generating revenue and there will be some level of fixed expense that is incurred and that will drain the P&L for everyone. Nobody is spared,” Goenka said.
Industry executives and experts told the paper that there would not be much respite in April since it would take a while for consumer confidence to come back to normal.