Indian automakers rev up factories and incentives to exit slump

Linda J. Dodson

TOKYO — India’s major automakers have restarted factories that had been shut down since late March, taking a step toward rousing Asia’s third-largest economy out of its coronavirus-induced stupor.

Tata Motors says it recently resumed production at its plant in the eastern state of Jharkhand. The automotive arm of Tata Group, one of India’s largest conglomerates, now has all six of its Indian vehicle assembly plants operating again, according to the company.

Automakers now face the challenge of jump-starting stalled sales, which were already declining before the coronavirus pandemic.

Demand is gradually coming back, Tata Motors says. The company has reopened around 60% of commercial-vehicle dealerships and about 70% of showrooms for passenger cars following an easing of stay-at-home restrictions in all but the hardest-hit areas. Other automakers have also gone a long way toward restarting dealerships.

But with India expected to slip into contraction under the weight of the world’s largest lockdown, automakers see no clear prospects of a full-fledged sales rebound.

To spur car buying, market leader Maruti Suzuki has teamed with HDFC Bank and ICICI Bank to offer auto loans with low monthly payments. Rival Mahindra and Mahindra, which has its own auto finance arm, will postpone payments on some car purchases until 2021.

Securing parts presents another challenge. In Tata Motors’ commercial-vehicle division, only about 60% of the parts supply has resumed, even though 80% of suppliers have restarted their factories. Other automakers face similar supply uncertainty.

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