Low demand, low production hit auto industry | Ludhiana News

Ludhiana: Ludhiana is the biggest hub of auto parts industry in India and both manufacturers and traders are based here in very high numbers. Ever since the spread of coronavirus the auto parts industry has taken a bad hit and hopes of the businessmen related with the industry have been dashed as in the beginning of 2020 the industry was showing some signs of improvement after the last year’s record recession in auto sector.
However presently the major issues being faced by the industry are low production in the factories and less inflow of orders. According to the businessmen there seems no hope of improvement for at least next six months and its now up to state and centre government to take corrective measures to save their industry.
Upkar Singh Ahuja, leading auto parts manufacturers and president of the Chamber of Industrial and Commercial Undertakings (CICU), “The auto parts manufacturing industry is passing through a very bad phase as production is down due to less availability of labour and also very less inflow of the orders. In the beginning of this year it seemed that the industry was coming back on the track of progress but coronavirus outbreak spoiled everything. Due to the lockdown losses worth several hundred crores have been incurred by the auto industry. Now, when some movement is being seen in other sectors, the situation is quite opposite in the auto industry. The only possible way by which the auto sector could be saved is by bringing in the vehicle scrapping policy, under which the vehicles which are 15-year-old should be scrapped and owners should be incentivised. This would not only boost the demand for new vehicles but also for the auto parts.”
According to Gurpreet Singh Kahlon, another auto parts manufacturer and member of Micro Small and Medium Enterprises (MSME) Board of India, “In comparison with other sectors, the auto parts industry is facing a different set of problems. The biggest trouble for us is the highest rate of GST on our industry, which is 28%. This leads to high cost of investment and blockage of capital in case of delay in GST refunds. So, the only way by which immediate boost to our industry can be given is reducing the GST on auto parts by 10%. Already the central government is considering the proposal of reducing the GST on complete automobile sector from 28% to 18%, if that reduction is possible, then why not reduction on the auto parts.”
Sanjay Narang, an auto parts trader, said, “Our entire sales network is based in other states and majority of our sales come from far-off states in North East but due to problems caused by the pandemic the supplies to our customers remained suspended. Now, when everything is returning to normal we still do not have orders as our customers are reporting very low demand and huge quantity of unsold stocks lying with them as the reason for this. We request the government to introduce immediate relief measures.”

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