Indian auto sector is gearing up to meet pent-up demand. Auto manufacturers plan to ramp up production to cater to the pent-up demand and clear backlogs as most governments have eased lockdown measures. The move is likely to impact demand for steel and other industrial metals used by the auto sector.
Many manufacturers even had to halt production in late April and early May due to several factors, including semiconductor shortage, lack of oxygen cylinders, and the rise in COVID-19 cases which led to strict lockdowns. Thus, the waiting period for vehicle deliveries had increased.
Production is expected to also gradually stabilize by the end of June, says Tata Motors Passenger Vehicle unit. Tata Motors’ was operating at 50pc capacity under lockdown in April and May.
Mahindra & Mahindra would also resume operations after computation of demand and supply in the country, says the company. The company will ramp up production and ensure optimum inventory levels for when demand returns to normal levels.
India’s largest carmaker by market share, Maruti Suzuki, is ramping production cautiously after resuming production at its plants.
India auto production and sales fell in May in comparison to April this year. SIAM’s data suggested a drop of 57pc in vehicle production to 806,755 units. Sales dropped to 442,013 units.