(Photo: Bloomberg)
(Photo: Bloomberg)

Coronavirus pandemic drives automakers to shut factories

  • The step is being taken to protect workers, and to support efforts of the Centre and state governments to ensure social distancing
  • Weak vehicle sales amid a coronavirus outbreak have propelled automobile companies to close down factories in India

New Delhi/Mumbai: Some of India’s top automakers are temporarily closing their factories as the Covid-19 pandemic races through the country leaving a trail of infected people.

The step is being taken to protect workers, and to support efforts of the Centre and state governments to ensure social distancing.

Maruti Suzuki India Ltd said on Sunday that it will close its factories in Gurugram and Manesar in Haryana as well as its research and development centre in Rohtak.

“The duration of this shutdown will depend upon Government policy," Maruti Suzuki said in a statement.

Honda Cars India Ltd will shut both its manufacturing plants in Greater Noida, Uttar Pradesh and Tapukara, Rajasthan from Monday until 31 March. A decision to reopen them on 1 April will hinge on government advisories.

Hero MotoCorp Ltd, India’s largest two-wheeler maker, said it will shut all its plants across the country, and also a research and development facility in Jaipur, till 31 March. Plants in Colombia and Bangladesh will also be closed.

“Employees at all the other functions and locations, including the Centre of Innovation and Technology (CIT) in Jaipur in the northern Indian state of Rajasthan will continue to work from home, except for those whose physical presence is necessary to run the day-to-day essential services," Hero MotoCorp said in a statement.

Honda Motorcycle and Scooter India Pvt. Ltd, the country’s second-largest two-wheeler manufacturer, said it will shut all its four plants spread across Haryana, Gujarat and Karnataka.

With the number of cases rising in the Pune district and Pimpri-Chinchwad region of Maharashtra, automakers such as FCA India Automobiles Pvt. Ltd, Mahindra and Mahindra Ltd and Tata Motors Ltd, with manufacturing capacities in the vicinity, have also decided to stop production. According to senior executives at major auto parts producers, other automobile companies are likely to follow suit in the coming days.

“In light of heightened concern on spread of coronavirus in Maharashtra, we have decided to suspend the manufacturing operations at our Nagpur plant with immediate effect and Chakan (Pune) and Kandivali (Mumbai) from Monday night onwards. None of the plants are working on Sunday, 22 March 2020," said Mahindra and Mahindra in a regulatory filing on Sunday.

Tata Motors said it will sharply reduce operations by the end of Monday and be ready to close the plant in Pune by the end of Tuesday if the situation worsens.

Fiat Chrysler Automobiles (FCA) together with Fiat India Automobiles Pvt. Ltd (FIAPL), FCA’s joint venture manufacturing facility in Ranjangaon, announced today that it will work with the government to temporarily close operations and suspend production to protect the health and safety of employees," said FCA India on Sunday. The suspension, which will remain in place till March-end, is in response to the increasing prevalence of Covid-19 cases in Maharashtra, particularly in Pune, the company said. In addition to ensuring the safety of workers, weak vehicle sales accelerated by the Covid-19 outbreak have propelled automakers to shut factories. In the past week, footfalls at automobile dealerships have halved and led to significant decrease in retail sales.

In addition to the Union government’s efforts, states governments such as Maharashtra, Rajasthan and Gujarat have ordered a complete lockdown to protect more citizens from getting infected with the coronavirus.

A senior executive at one of the largest auto parts manufacturing firms, who declined to be named, said most automakers are likely to close their manufacturing capacities to reduce potential risks to their employees.

“Also the demand scenario is so grim for April that it doesn’t make sense to operate assembly lines. In tier II and III- level component manufacturing companies, basic hygiene standards are not adhered to. Hence, it’s in everybody’s interest that the facilities are shut down for sometime," the executive said.

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