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Disruption in supply chains pose real challenge for auto sector, says Ashok Leyland chief

Ashok Leyland said it is difficult for the industry to reboot even in a phased manner due to disruptions in supply chain.

SNS | New Delhi |

A week after Hinduja Group flagship firm Ashok Leyland received permission from the government to resume operations at three of its plants, the company on Thursday said it is difficult for the industry to reboot even in a phased manner due to disruptions in supply chain.

Managing Director and CEO of Ashok Leyland, Vipin Sondhi, said that there is a need for the industry to collaborate with local agencies to ensure uninterrupted supply chain for original equipment manufacturers (OEMs) to commence production and help boost the economic revival of the nation.

“Auto OEMs are dependent on the ancillary sector. A smooth flow of the complete supply-chain is vital for the production of vehicles,” said Sondhi said adding, while the government has given the auto sector the permission to resume operations in a phased manner in certain geographies, with certain norms and conditions, it still remains a challenge for the industry to resume operations.

“This is because, while the OEM production unit might be in the green zone, even if one ancillary unit that supplies a small part happens to be in the red zone, it will make a component of the vehicle unavailable, thereby making the production process impossible,” he added.

Earlier this week, Ashok Leyland received permissions to resume operations at Alwar, Bhandara and Pantnagar plants, but like it’s peers including Maruti Suzuki, Hyundai, Toyota, Ford, Mercedes-Benz and Tata Motors, the company is yet to begin its functioning due to issues in the supply chain and closure of showrooms due to the lockdown.

The home ministry had allowed industrial units in rural areas and those outside municipal limits to resume partial production under strict safety and hygiene norms from April 21 with an eye on kick-starting economic activity during the extended lockdown up to May 3.

Further extension of the lockdown would lead to additional damage to the production of this sector which will eventually affect the drowning economy.