The pandemic-induced lockdown resulted within the shutting down of production at original equipment manufacturers (OEM). It also led to disruption of the whole value chain of major industries in India, and thus negatively affected production of auto spare parts in micro, small and medium-sized industries. additionally, the reduction in consumer demand for passenger vehicles contributed to a loss in revenue and a severe credit crunch within the sector.

According to the Society of Indian Automobile Manufacturers, the world registered negative growth in sales of all vehicle categories in FY21 (2.24% decline in sales of passenger vehicles, 13.19% fall in sales of two-wheelers, 20.77% fall in sales of economic vehicles, and 66.06% fall in sales of three-wheelers).

Also, production cuts thanks to slump in demand negatively impacted employment growth. consistent with the Parliamentary Panel report submitted to Rajya Sabha chairman M Venkaiah Naidu, the estimated job loss within the Indian automobile sector stood at 3.45 lakh. the most important carmaker Maruti Suzuki cut temporary workforce by 6%, following the drop by car sales. The auto sector, which contributed quite 7% to India’s GDP, is now facing a severe contraction, with some automakers facing year-on-year decline of quite 30% in recent months.

The role of the govt 

In the midst of the second wave, the world must still strive and increase production and sales, while taking necessary steps to make sure safety of its employees, partners and customers. during this regard, the government’s nationwide vaccination drive and therefore the effort to make conditions such employees are often vaccinated within the factory premises are notable.

As social and physical distancing are going to be the norm for a few time, a neighborhood of commuters might not use public transportation, and this may cause higher demand for private vehicles, especially of two-wheelers and affordable four-wheelers.

The introduction of the bill is an indirect public intervention for the Indian automobile sector. as an example , the demand for tractors is predicted to extend as farmers would get access to more sources of income.

Going forward, the world are often supported by government policies, like reducing the value of raw materials required for production and lowering tax rates imposed on the car sector. Such measures can help the car industry recover faster and stronger.


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