New Delhi: India’s automotive industry needs a series of boosters together with an early announcement of the car scrappage coverage to come out of the slowdown, which was exacerbated by the coronavirus pandemic, JK Tyre & Industries chairman Raghupati Singhania said.
The current resolution to curb the import of sure pneumatic tyres is a step in the proper path to promote home manufacturing, Singhania said. However, far more is required to speed up the method, he added.
“A lot is riding on the implementation of the much-needed scrappage policy to effectively capitalise on the pent-up demand,” Singhania, additionally the managing director of the company, said in an e-mail interplay with ET. “A temporary relief on GST from current 28% to 18% in the auto sector could also help in lifting the demand.”
Automobile gross sales throughout classes recorded their steepest decline within the last quarter, shrinking 75% from a year earlier to 1.four million models, as manufacturing in addition to gross sales have been severely impacted by the Covid-19 pandemic and lockdown. Auto gross sales had declined 18% to 21.5 million models in fiscal 2020 ended March 31.
JK Tyre expects to attain 80% of pre-Covid manufacturing inside the present quarter~
While demand has been recovering on a month-on-month foundation since May when the market reopened, Singhania said the industry was still passing by way of a stabilisation interval, the place the main focus was on enhancing the availability chain, bringing back labour and strengthening the enterprise ecosystem. Demand is expected to be nearer to the pre-Covid ranges in the direction of the festive interval.
JK Tyre has seen some inexperienced shoots within the substitute market and posted robust double-digit progress within the enterprise in June, led by business car tyres. Direct gross sales to automakers, which have been subdued until a number of weeks in the past, too witnessed some revival in July, throughout passenger car, two-wheeler and three-wheeler segments.
Singhania said: “In the changed normal, personal mobility is expected to take priority and that might add to the sales momentum. Overall, while the short-term outlook looks subdued, the long-term growth prospects remain promising.”
JK Tyre does count on a brief and localised influence in sure pockets, particularly on manufacturing and provide chain, due to intermittent lockdowns in some states, Singhania said.
Therefore, the company is retaining a detailed watch on the Covid-19 developments and planning manufacturing and stock accordingly to take care of the uncertainties and to guarantee availability the place the demand exists. It expects to attain 80% of pre-Covid manufacturing inside the present quarter.
Singhania admitted that managing liquidity had been one of the largest challenges for the company amid the Covid disaster. “So, we are focusing on conserving cash currently, through multiple measures, such as, timely or early collection of receivables, prioritisation of vendor payments, optimising on costs and enhanced focus on overall efficiencies,” he said, including: We have additionally deferred our main growth initiatives. We will prioritise and transfer ahead.”
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