Stating that the auto component industry is facing losses of up ₹1,200 crore per day amid a country-wide lockdown, industry body ACMA on Friday sought urgent measures from the government, including relaxation in borrowing norms, to combat the situation.
The Automotive Component Manufacturers Association also added that its members are working to ensure that no jobs are cut and salaries are paid on time for both permanent and contractual employees. Further, the industry body has also created a task force to evaluate the possibility of manufacture of face masks, hand sanitisers by its members, or import ventilators using their CSR funds.
“The auto component industry stands by the government in this hour of challenge. However, with complete stoppage of production in the vehicle industry and scarcity of working capital, the situation in the component manufacturing units, including the tier-2s and tier-3s has become quite acute, threatening their survival,” ACMA president Deepak Jain said in a statement.
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“We have requested the government for helping us with immediate relaxation of borrowing norms and statutory payments, extension of moratorium on payment of principal and interest of loans for a year, among others,” he added.
ACMA has also sought relaxation in fixed electricity charge and in levy of demurrage charges for at least seven days for import cargo clearance.
Mr. Jain said auto component manufacturers, especially the tier-2 and tier-3, are facing severe hardship on the cash flow front, which if not immediately addressed will lead to insolvency of several companies. “Further, there is no clarity on how the market will pan out in the ensuing months, thus further eroding the industry’s confidence. It is estimated that the component sector is facing production loss of ₹1,000–₹1,200 crore per day,” Mr. Jain added.
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