India’s carmakers halt production as virus hits country

With more than 400 cases and eight deaths reported in India, some carmakers aim to start making ventilators instead.

India coronavirus
A security worker sprays disinfectant near the Gateway of India monument after Prime Minister Narendra Modi appealed to citizens to stay at home to curb the coronavirus outbreak [File: Prashanth Vishwanathan/Bloomberg]

India‘s biggest carmaker Maruti Suzuki India and peers including Mahindra & Mahindra, Mercedes-Benz, Fiat Chrysler Automobiles (FCA) as well as Hyundai Motor Co say they will halt car production in the country due to the coronavirus outbreak.

The move comes after carmakers shut plants last week in Europe, the United States, Canada and Mexico as the global death toll from coronavirus exceeded 13,000.

India’s sport-utility vehicle maker Mahindra & Mahindra said it aims to start making ventilators for coronavirus patients at its manufacturing plants, mirroring similar efforts by other carmakers including Ferrari and Fiat.

At least 425 people have so far contracted the disease in India and eight deaths have been reported in the country, prompting the government to suspend most train and metro services nationwide and order the closure of shops in several states until March 31.

Maruti, which builds half of all cars sold in India, said it would immediately shut production and office operations at its facilities in the northern state of Haryana.

“The duration of this shutdown will depend upon government policy,” Maruti, which is majority owned by Japan’s Suzuki Motor Corp, said in a statement on Sunday.

The western state of Maharashtra, which has recorded the highest number of confirmed coronavirus cases in the country, is home to one of India’s biggest auto hubs – Pune, where several carmakers are set to halt production indefinitely or until March 31.

Mahindra has stopped manufacturing at one of its plants in Maharashtra and will suspend work at two others from Monday, it said in a statement.

Anand Mahindra, group company chairman, said on Twitter that the company will immediately begin work on how it can make ventilators at its plants.

“A lockdown over the next few weeks will help flatten the curve and moderate the peak pressure on medical care,” Mahindra said, adding that it will offer its holiday resorts as temporary care facilities and help the government in building such centres.

Daimler AG’s Mercedes-Benz and Fiat as well as bike maker Bajaj Auto all said they will halt production at their Pune plants until March 31. Fiat said it will not cut jobs and will continue to pay salaries of all its employees.

India’s top-selling bike maker Hero MotoCorp Ltd said on Sunday it has stopped manufacturing at all of its plants in India, Bangladesh and Colombia.

Indian carmaker Tata Motors Ltd said on Friday it was rapidly scaling down activity at its car factory in Maharashtra and was preparing to close it if concerns about coronavirus deepen.

Meanwhile Volkswagen AG’s India unit said on Sunday it has stopped production at its facility in Pune for three weeks as part of an ongoing business transition and is ensuring the safety of its employees.

South Korea‘s Hyundai Motor Co said on Monday it was suspending production at its Chennai plant from Monday through the end of March in response to the state government’s lockdown measures as the virus spreads. It had previously closed its assembly plant in Montgomery, Alabama after an employee there tested positive for COVID-19. 

The South Korean government said on Monday that it would provide logistical and financial support to help its automotive industry through the coronavirus crisis, including speeding up customs clearance, arranging freight transportation and providing liquidity support for the industry.

Carmakers in South Korea, which include Hyundai and Kia Motors, employ about 12 percent of South Korea’s workforce, according to official figures.

“It’s time to prepare for the shock of a global demand contraction and European supply issues,” Trade Minister Sung Yoon-mo said in a meeting with parts supplier executives and industry associations, according to a readout from the ministry.

“Survival is the most crucial thing in this unprecedented crisis when both demand and supply contract at the same time.”

The ministry gave no details on how much liquidity support the government would provide or what form it might take. The assistance is part of 50 trillion won ($39bn) in emergency financing announced last week to boost the economy.

Source: Reuters