Top auto companies resume production after profit slumps on weak demand
Hyderabad: Even as India lurches towards the end of its long coronavirus lockdown, the country's leading auto companies moved to resume producition at their plants uncertain of India's economy.
Tata Motors, the country's second biggest auto maker said it has commenced operations at its Pantnagar (Uttarakhand) and Sanand (Gujarat) facilities on Wednesday after getting approvals from relevant government authorities.
The other plants in Lucknow (Uttar Pradesh), Dharwad (Karnataka), Jamshedpur (Jharkhand) and Pune (Maharashtra) are in final stage of readiness and expect to begin production over the next few days, Tata Motors said in a statement.
"Our utmost priority is the safety and wellbeing of our employees, customers and ecosystem partners. Therefore, we restart operations with limited, essential staff in each plant, adhering to all mandated safety norms while efficiently meeting operational requirements," Tata Motors CEO and MD Guenter Butschek said.
Hinduja Group's flagship firm Ashok Leyland on Wednesday said it has resumed manufacturing operations in all its plants in the country.
"With the relaxation of the lockdown, we have resumed operations in all our plants across the country, after obtaining necessary approvals from the relevant authorities," Ashok Leyland MD and CEO Vipin Sondhi said in a statement.
The commercial vehicle major will be ensuring all the necessary health and safety protocols with regard to COVID-19 in its facilities in accordance with the guidelines of the Home Ministry and the relevant local authorities, he added.
Yesterday, the country's largest carmaker Maruti Suzuki India (MSI) resumed operations at its Manesar plant in Haryana after about 50 days of closure due to the coronavirus-led lockdown.
The company which rolls out high selling models like Alto, Swift, Dzire, S-Presso, Ertiga and Baleno from the plant, has initiated the work on a single shift basis.
However, results of the companies indicate a long road ahead. Maruti Suzuki India (MSI) on Wednesday reported a 27.77 percent decline in consolidated net profit to Rs 1,322.3 crore for the fourth quarter of 2019-20, on account of lower sales volume, higher promotion expenses and depreciation expenses.
The company had posted a net profit of Rs 1,830.8 crore in the January-March period of 2018-19, MSI said in a statement.
Net sales during the quarter declined to Rs 18,207.7 crore, down 15.2 per cent from Rs 21,473.1 crore in the year-ago period.
Total volume sales during 2019-20 were down 16.1 per cent to 15,63,297 units. Of this, 1,02,171 units were exported, the company said.
The company said profitability was hit during the fiscal on account of lower sales volume, higher sales promotion expenses and depreciation expenses.
