India is currently under the second phase of world’s longest lockdown due to the outbreak of COVID-19 pandemic. This has resulted in delaying of overseas trade as orders worth RS. 1000 crore are stuck for Bajaj Auto Ltd. for the month of April.
Bajaj Auto is India’s largest two and three wheeler manufacturer exporting vehicles globally. They are now trying to figure out how to deliver the existing orders to their international partners during this grave situation.
Society of Indian Automobile Manufacturers (SIAM) reported an export of 48% and 45% of two and three wheelers respectively of the total production in FY2020. Aditya Jhawar, analyst at Investec Capital Services (India) Pvt. Ltd. commented on the consequences of the lockdown in the major exporting markets of Bajaj such as Latin America. The condition is not as dreadful as it is here and thus their stock market has not undergone any shutdown till now. The company has envisaged to make inroads into the South East Asian nations where the state of affairs are better off than that in our country.
The company has stated to its employees of all levels that they will face a salary cut of about 10% from the middle of this month till the lockdown comes to an end to curtail the “fixed operating costs”. Rajiv Bajaj, Managing Director of the company has refused to take his salary in this period. Dilip Pawar, President, Viswakalyan Kamgar Sangathan (VKS) has confirmed that an amount of 2500-3000 will be reduced per person and they have agreed upon this terms to express solidarity during this time of dire crisis.
However there will be no pay cuts if Govt grants the permission of resuming mercantile activities after April 20, though this is still unpredictable. The industry won’t be able to immediately resume their production because of the obstructions that need to be faced such as inadequate workforce, restrictions on movement of goods in the industrial areas etc.