END of LOCKDOWN? Volvo Eicher gets nod to restart production

VECV makes buses and trucks

VE Commercial Vehicles, a joint venture between Sweden’s Volvo Group and India’s Eicher Motors, said it has received permission from the government to restart manufacturing operations at its commercial vehicle manufacturing plant in Madhya Pradesh.

Considering the wider lock-down in place, it said, it is not planning on any immediate ramp-up in manufacturing operations.

“The current permission granted to restart operations allows presence of only 25-30% workforce. The management is preparing the facilities for starting operations in future as per requisite safety precautions and guidelines issued by the Government,” it said.

Another problem is sourcing components. Companies like VE, Tata Motors and Maruti Suzuki make only some of the parts that go into their vehicles, and source a large number of items — from batteries, lamps and windshields to nuts and bolts — from their vendors.

“Many of our suppliers continue to be closed, and dealers are also not functioning currently,” said VE.

“And with current restrictions of movement of people and vehicles, start of complete manufacturing operations will still take more time. Till then, there are some stocks of already produced BSVI vehicles that will be despatched first, and operations will be run in a very limited manner based on availability of parts from suppliers,” it added, referring to the countrywide lockdown imposed until May 3 in view of the rapid spread of Coronavirus in India.

At present, nearly all industrial units in India — except those producing essential items like food and medical supplies — are shut.

It is also difficult to move goods from one place to another due to frequent road-blocks put in by the police as well as the non-availability of supporting infrastructure such as loading and unloading facilities, godowns and service centers.

Nevertheless, the grant of permission given to the VE plant may indicate that the government expects some kind of relaxation in the limits placed on industrial and transportation activity from next week.

Even though the permission given won’t result in finished trucks rolling off the production line immediately, said VE, it will definitely help in preparing the grounds for a ramp up.

“Activities are starting for maintenance of plant and machinery, sanitisation activities, annual stock-taking and for organising facilities for meeting social distancing and other safety norms,” it said.

It said the company’s first priority will be to dispatch vehicle parts to customers and service centres so that no truck or commercial vehicle is kept off the road due to lack of spare parts, given that trucks are essential to keep the supplies of essential commodities moving.

The company said its dealers across the country are offering emergency support for vehicles carrying essential goods, and around 85 workshops have already started customer support activities using minimum staff.

VE is the first automaker to announce any development as far as the restarting of operations are concerned. None of the other major automakers have yet made any announcements, either about getting permission from the authorities or any plans to do so themselves, including Tata Motors, Maruti Suzuki and Mahindra & Mahindra.

Another area of concern is unsold inventory, particularly those under the previous BS-IV emission standard.

It remains to be seen if the government will allow vehicle dealerships across the country more time to get rid of any BSIV vehicles that they may have failed to sell due to the Coronavirus crisis. The last date for liquidating BS-IV stocks was March 31, by which time the country was already in lock-down.

Hero MotoCorp, the world’s largest two-wheeler maker in terms of volumes, is reported to have around 1.5 lakh unsold BSIV two-wheelers, and is reportedly willing offer discounts to buyers to clear them out.