Auto Inc starts in neutral gear as infections ease | Economic Times

Maruti Suzuki and Hyundai Motor India, the country’s top two car makers, are set to resume production on Monday after completing maintenance shutdowns that were brought forward due to the devastating second wave of Covid-19.With the daily caseload coming off a peak touched in the first week of May, and improved supplies of oxygen for Covid-19 patients, the automotive industry is ready to restart operations, according to vendors and original equipment manufacturers.82697331Two-wheeler makers Hero MotoCorp and Honda Motorcycle & Scooters India are also scheduled to resume production on Monday, while Suzuki Motorcycle will start later in the week.Output this month is likely to drop to 30-40% of April’s production levels for over half of the market, as component suppliers adapt to functioning with limited availability of oxygen, which has been diverted for medical purposes.Production will resume in a calibrated manner, with a greater focus on observing Covid-19 protocol and finding alternatives to oxygen in the manufacturing process, according to the production plan Maruti Suzuki shared with its suppliers.Maruti Suzuki plans to produce 2,000 cars a day initially and increase output to 4,500 cars daily by the end of the month.Production would be 36,000-38,000 units this month for Maruti Suzuki, which is less than 25% of about 160,000 cars made in April. “Our Covid taskforce has relooked at all the safety protocols. In addition to all the measures implemented for Wave 1, we are instituting the use of N95 masks, face shields in some situations, better ventilation measures, strengthening checks at entry and reinforcing caution in employee communication,” said a Maruti spokesperson, while confirming that production will resume on Monday.The company has told vendors that the ramp-up plan is only indicative and could be accelerated, depending on actual output and a finished goods inventory level equivalent to about five days of production.Automobile factories in Gujarat have opened. Suzuki Motor Gujarat, which suspended production at the Hansalpur plant on March 23, started production last Friday. MG Motor resumed production in Halol.An email sent to Honda Motorcycle & Scooter India did not elicit any response till press time. An executive at Hyundai Motor and an MG Motor official confirmed the development.INVENTORY SLUMP With 80% of the market still under lockdown or restrictions, passenger vehicle inventory has dropped to a record low, putting pressure on car makers to resume operations. However, twowheeler makers are starting off on a slow footing because there is adequate inventory and demand is sluggish.Hero MotoCorp said it is starting with a single shift at three of its plants – Gurgaon and Dharuhera in Haryana and Haridwar in Uttarakhand – from Monday.The three plants can produce 6.9 million units a year and account for almost 75% of the company’s total installed capacity of 9.1 million units.