Auto plants stare at 5-day output loss

Normalising output to be key challenge once rain stops

Major automobile firms, including Hyundai, Ford and Eicher Motors, are staring at a production loss of at least five days at their Chennai plants, owing to the incessant rains that flooded the city. The situation has also prevented these companies from dispatching finished products to various markets as the supply chain remains crippled.

India’s second-largest car maker Hyundai, which operates two plants in the city, is seeing a daily production loss of 1,800 vehicles. Dispatches of equal number of units are impacted. Hyundai has a capacity to produce about 680,000 vehicles a year. A company spokesperson said the firm expects to resume operations from Saturday. This will, however, be based on the improvement in situation. Hyundai also happens to be the largest exporter of cars from India.

Ford has halted operations at its plants that manufacture vehicles and engines. Ditto with the Renault Nissan plant. Ford is the third-largest exporter, while Nissan occupies the fourth spot. Renault, which is riding high on its recently-launched vehicle Kwid, will also see delayed delivery to customers.

“Inclement weather has created challenges for supply of components to the production line and delivery of vehicles to dealers across the country,” the Hyundai spokesperson added. For Hyundai, the development would lead to a longer waiting period at the customers end for models like Creta and i20.

For most of these companies, it will be a challenge to recover the production and sales loss going forward. Eicher Motors, known for its Royal Enfield bullet, said it saw a production loss of 4,000 units in November owing to rains. The number will increase once assessment is done for the current month. The waiting period for Royal Enfield bullets will also move up. Leading tyre maker Apollo also saw a production loss of 450 tonnes till December 2. The total loss could be significantly higher.

According to an industry executive, even after manufacturers are able to resume production, it will be an uphill task to reach the normal rate of production. “I do not think a plant will be able to reach the normal capacity utilisation level before 15-20 days. There will be challenge of logistics in component supply and employee attendance for next several days.”