Eicher Motors gains after VEVC gets nod to restart operations in MP

Eicher Motors rose 2.62% to Rs 14,700 after the company said its commercial vehicles unit received the required government permissions to restart manufacturing operations in Madhya Pradesh.

The auto maker announced during trading hours today that 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.

VE Commercial Vehicles (VEVC)'s priority is to dispatch parts to customers and service centres to minimise impact for running essential service vehicles. 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.

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

With local jurisdiction's advisories and permissions, our dealerships are maintaining emergency support for vehicles carrying essential goods with Eicher On Road Service (EOS 24x7) and about 85 workshops have started lean customer support activities.

VECV will continue to monitor the situation closely and take appropriate action as per government and administrative guidance.

VECV reported 82.7% decline in total sales to 1,499 units in March 2020 from 8,676 units in March 2019. VECV's total domestic sales tanked 80.8% to 1,409 units in March 2020 compared with 7,329 units in March 2019. Total exports crashed 94.5% to 67 units in March 2020 as against 1,216 units in March 2019.

VECV is a joint venture between Eicher and Sweden's AB Volvo. VECV which operates in India's commercial vehicle space. VECV has a complete range of trucks and buses from 5-55 tonnes, and its integrated manufacturing plant in Pithampur, Madhya Pradesh is the global hub for medium duty five- and eight-litre engines for Volvo Group.

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