Here is a complete brief of all the major events in the automotive space this week.
From zero percent in April, the auto industry was able to reach 90-95 percent sales in July compared to the same month last year. Vehicle makers are pushing their suppliers to produce as much as possible. However, majority of the people who made up the labour force at the component making plants had moved back to the villages amid the lockdown. We take a look at this issue in today’s automotive wrap of the week. But first here is the complete brief of all the major events in the automotive space this week.
Mahindra looks for partnerships in EV
Homegrown auto major Mahindra and Mahindra (M&M) is looking for strategic partners for its electric vehicles business in order to further scale it up, a top company official said on August 7.
The auto major, which reported a 94 per cent decline in consolidated profit at Rs 54.64 crore for the June quarter, also said there is no impact of COVID-19 on its EV launch plans.
Kia unveils Sonet
After tonnes of spy pics and teasers, Kia has finally unveiled the Sonet compact SUV.
First showcased at the 2020 Auto Expo, the Kia Sonet is the second car to be premiered first in India.
Mahindra cancels bid to make vans for US
Mahindra & Mahindra has bailed out from the bid to manufacture small delivery trucks for the United States Postal Service that is worth $6.3 billion.
The company has written off the investment it had made towards this project, a top official of the company said.
Spinny buys Truebil
Spinny and Truebil, two of India’s biggest start-ups in the online used-vehicle space, have joined hands to tap the burgeoning second-hand car market.
Gurugram-based Spinny will acquire 100 percent of Mumbai-based Truebil for an undisclosed sum, top officials of both the companies confirmed to Moneycontrol.
Toyota releases teaser of new SUV
The second car to come out of the Suzuki-Toyota partnership will be the Toyota Urban Cruiser, the teaser for which has dropped on the company’s twitter handle.
The new SUV will be based on the Maruti Suzuki Vitara Brezza and a launch is expected to be sometime during the festival season between late August and early September.
Tata Motors seeks approval to pay MD
Tata Motors is seeking shareholders’ approval to ratify the payment of minimum salary to its MD and CEO Guenter Butschek, a German national, for FY20 -- and a hike for FY21.
According to the company, Butschek’s total remuneration for FY20 was Rs 19.27 crore. The Companies Act 2013 prescribes a certain limit for executive payment if a company has ‘inadequate profits’.
Increasing vehicle demand amid manpower shortage
Three months after scenes of reverse migration emerged from almost every city the auto component industry continues to remain impacted by the shortage of manpower keeping vehicle makers on the edge.
Scores of auto parts suppliers are operating with less than half of their full labour strength though there is a need to increase production rapidly. The intense lockdown seen in April had driven out the migrant workforce back to their villages resulting in the shortages.
With 30 operational plants in India, Minda Corporation is one of the largest suppliers of auto parts to the vehicle manufacturers. Though the company has seen a gradual uptick in number of workforce in the past month there is still a shortfall.
Ashok Minda, chairman of Minda Corporation said, “We do have to face issues like lack of manpower and we are working on how to get them back. So many workers have gone back to their villages and to bring them back is a real challenge. We cannot readily hire new people since they have no training. Because it is a highly skilled job the productivity goes down.”
Other bigger suppliers report that contract labourers are facing family pressure against rejoining their previous employers for fear of contracting COVID-19. Though irregular but transport options have been thrown open by the government in a limited manner.
“Our entire permanent workforce is still with us. If we have a labour issue then it is with the temporary workers. The families of people who have gone back also need to be convinced of rejoining work and that is not easy. It may be difficult for them to find jobs in their native places but they won’t readily come back,” said a top official of a tyre manufacturing firm.
Skilled jobs involving working on a production line and vehicle testing to name a few, cannot be delegated to a temporary worker even after providing training. The permanent workers have the required educational qualification that temporary workers lack. Vehicle manufacturers are thus not directly impacted by the reverse migration of workers.
“Our production lines are impacted because of the need for social distancing and other similar measures and not because of lack of workers. But temporary workers are in short supply and more so at our vendor partners and because of this there is a sense of anxiety,” said a top official of a Mumbai-based automaker.
The automotive supply chain has to work flawlessly to get production back on track. If the supply of even a single component is impacted then the entire supply network gets disrupted.