HomeLockdown exit: Auto companies say operational hurdles make Apr 20 restart difficult

Lockdown exit: Auto companies say operational hurdles make Apr 20 restart difficult

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By Alisha Sachdev  April 19, 2020, 11:25:03 AM IST (Updated)

Lockdown exit: Auto companies say operational hurdles make Apr 20 restart difficult
Even as certain industries have been allowed to resume operations from April 20 in a phased manner, most automakers said operational challenges were hampering them from doing so.


Mahindra & Mahindra, which manufactures commercial vehicles, passenger vehicles and farm equipment, will not be able to restart operations at its automotive factories from next week, sources told CNBC-TV18.

The company's automotive plants have not been permitted to restart operations yet, but its tractor division can. But resuming operations is not easy as many of the tractor plants lie in containment zones.  Only two of the company's seven plants in the country lie outside of containment areas and can be opened for operation next week.

However, sources told CNBC-TV18 that resuming production at these locations will be a function of the availability of supplies. The company, sources say, will need to evaluate its supplies and the status of its suppliers before full-scale operations can begin.

Automakers have been talking to their district administrations for clarity on the conditions for restarting production. However, since auto dealerships will not be allowed to open vehicle showrooms until after May 3, vehicle makers don't see any point in manufacturing vehicles only to store them in factories and block cash flow.

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Many vendors supplying components to vehicle makers have also had to shutter operations over the past month, and a significant number fall in the red and orange zones.

Another challenge for automobile firms is the rule that factory staff must be housed either in or adjacent to the premises. Additionally, many blue-collar and white-collar workers also reside in or around containment zones, and hence, will be unable to commute to and from the factory location.

Mahindra and Mahindra's farm equipment sector has factories in Zaheerabad, Nagpur, Rudrapur, Jaipur, Rajkot and Mohali.

The three locations where M&M's automotive division holds operations are a Greenfield facility in Chakan in Pune, Zaheerabad in Telangana and Haridwar in Uttarakhand, in addition to its facilities in Nashik and Kandivali in Maharashtra.

Also read: Cement companies in no hurry to restart production because of weak demand
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