Toyota India warns of bumpy road to automotive sector recovery
NEW DELHI, NNA-A Toyota Motor Corp. subsidiary has warned of a bumpy road to recovery for the Indian automobile sector as Covid-19 containment measures hurt the economy.
The Japanese carmaker’s Indian subsidiary, Toyota Kirloskar Motor Pvt. Ltd., calls recovery in the locked-down country uncertain for now but expects eventual profound changes in the industry.
“It’s still unclear whether we will move from ‘V’ to a ‘U’ or ‘L’ shaped recovery,” the subsidiary’s managing director Masakazu Yoshimura said in a statement.
V-shaped means rapid economic turnaround after a slump, U-shaped denotes slower recovery and an L-path suggests years before recovery.
“We are witnessing demand, supply, market and liquidity shocks, decline in real gross domestic product growth rates (and) foreign currencies becoming weaker against the dollar,” he said.
The automaker’s India sales declined 24.2 percent to 114,081 units in the fiscal year ended March 2020, dragged down by 45.2 percent sales decline in March alone, according to data of the Society of Indian Automobile Manufacturers released on Monday.
Post-Covid-19, the auto industry will face a new normal, Yoshimura said, meaning carmakers should “stop jobs that do not fit the needs (and) change procedure…to continue to navigate in these turbulent times.”
Manufacturing is likely to resume gradually after the government decided to ease some of the lockdown restrictions from April 20, and further opening is expected even if virus cases persist.
“A prolonged lockdown is not sustainable,” Shamika Ravi, an economist and former Brookings Institute Fellow told NNA on Thursday. “The government will have to gradually ease lockdown restrictions in the next few months to enable some key industries and services to operate.”
Total confirmed Covid-19 cases in India reached 13,387 with 437 reported deaths as of Friday morning.
The Toyota subsidiary on Thursday released what it describes as a “Restart Manual” as a guide for resuming business shortly after lockdowns. “This ‘Restart Manual’ is prepared not only for our use but also for the benefit of government, industries and stakeholders,” Yoshimura said.