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Restarting India: Major automakers refrain from resuming operations this week

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Restarting India: Major automakers refrain from resuming operations this week


Country's major automobile manufacturers (original equipment manufacturers) are avoiding to restart their operations this week while most of them will start operating in a phased manner after May 3, sources said.

India's major automobile manufacturers are not restarting their operations this week, and most of them of them will resume production in phases May 3, sources told CNBC-TV18. T

The central government's guidelines allow for partial resumption of operations in non-hotspot zones from today. But local administrations in many states have drawn their own rules, making it difficult for vehicle makers restart work at their factories.
The Home Ministry directive requires manufacturers to house staff and labour in the factory premises or a building adjacent to it. Automobile companies say this is difficult.
Automobile manufacturers based in Maharashtra, such as Volkswagen, Skoda, Mercedes-Benz, Mahindra & Mahindra, Tata Motors are unable to open factories from today.  Sources said many of M&M's plants, barring two of them are in containment zones, and its automotive factories don't have permission to operate yet.
Maruti Suzuki's three facilities in Gujarat, Gurgaon and Mansesar will also begin full-fledged operations only after May 3, and so will Hero MotoCorp. Hyundai, with its factory in Chennai in Tamil Nadu will also be unable to resume operations just yet because of the state govt's view to not implemenet the relaxations suggested by the Centre.
Automakers cite operational constraints such as movement and housing of staff, supply chain bottlenecks and lack of retail sales for being unable to resume operations in the short span of time after the Home Ministry announced  the relaxations.
Vehicle makers are of the view that the absence of a functional retail and vendor network will block cash flow. They may utilize this time to assess manpower requirements, sources added.
Meanwhile, Karnataka-based OEMs such as Toyota Kirloskar Motors and TVS Motor may look to begin skeletal operations, as there are fewer restrictions in the state in terms of mandating companies to accommodate staff within or adjacent to the factory.
Automobile companies are engaging with local administration to draw up restart plans and obtain permissions.
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