A file photo of a Motherson Sumi factory.
A file photo of a Motherson Sumi factory.

Auto suppliers follow suit, shut operations

  • Move comes following vehicle makers announced production suspensions
  • Motherson Sumi says the government policies and directives require closure of production units across the globe for different periods

Auto component makers in India are temporarily shutting their factories, in the footsteps of vehicle makers who have announced production suspensions to adhere to government guidelines to curb the rapid spread of Covid-19.

Leading auto parts makers such as Bharat Forge Ltd, Motherson Sumi Systems Ltd, Sundaram-Clayton Ltd, Minda Industries Ltd, Lumax Industries Ltd, JTEKT India Ltd and ZF India Pvt. Ltd have announced steps to shut operations as the viral disease continues to spread across the country.

Vinnie Mehta, director general at the Automotive Component Manufacturers Association of India (Acma), said in a phone interview on Monday that the representative body of the auto parts suppliers is closely monitoring lockdown measures implemented in various states as they are likely to severely disrupt the business plans of companies, especially small and mid-sized enterprises.

“The tier two and three suppliers are in a panic mode as they do not have long-term visibility of the plans of their customers and automakers and also that they are worried about their financials, which were already stressed due to the ongoing economic slowdown. Now Covid-19 has come as a shock for small businesses as it is an unplanned economic crisis," Mehta said, while expressing concern at the increasingly grim situation.

Pune-based Bharat Forge, India’s largest exporter of automotive components, said in a regulatory filing that it is suspending operations across all its offices and manufacturing units in India from Monday until 31 March.

“This action is also in line with the directions issued by the Government of Maharashtra on 22 March 2020," the maker of engine and transmission parts said on Monday. ZF India said it has shut down its factory in Chakan, Maharashtra, until 29 March.

On Sunday, Motherson Sumi said the government policies and directives require closure of production units and offices across the globe for different periods.

“Accordingly, the company has decided for closure of respective manufacturing facilities and/or offices," the company said in a statement. The timeframe of the closures will depend upon directives of the respective authorities, it added.

Chennai-based Sundaram-Clayton Ltd said that as an interim measure, it will close all its manufacturing facilities and offices on Monday and Tuesday. To be sure, as of Monday afternoon, Tamil Nadu had not issued any lockdown advisory.

Gurgaon-based Minda Industries Ltd and Lumax Industries Ltd have announced indefinite closures of their plants and offices across the affected regions.

“In light of heightened concern on spread of Covid-19 in select districts in India, Government directives and certain OEMs announcing production closure, it has been decided to suspend the manufacturing operations in Northern India, Rajasthan and Maharashtra till further notice," Minda Industries said in a statement.

The company said the duration of this shutdown would depend on government guidelines. It added that work from home has been implemented at its global engineering and development centres in Europe. “At our overseas operations, production volumes at Spain, Mexico and ASEAN have been significantly impacted," the company said in a statement.

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