How Dangerous is Zero-Sales By Maruti Suzuki for Delhi NCR’s MSMEs
Apart from Maruti Suzuki's own economic crisis the entire Delhi NCR's automobile manufacturing MSMEs are forced to face tough financial crisis. Over 15000 MSMEs that are working with Maruti spread between Faridabad, Gurugram, Manesar and other areas with an estimated collective human resource of Four Lakh labours, technicians are going to be effected with this.
When the country’s largest carmaker announces zero business, certainly it means something very significant for the entire industry. Today on labour’s day Maruti Suzuki India (MSI) reported that it did not sell a single unit in the domestic market last month due to coronavirus-led nationwide lockdown. Although this was expected but this might have high pressure and multi layered effect on the economy.
Impact on MSME Ecosystem of Delhi NCR
This will have a major impact on thousands of MSMEs that are working with Maruti Suzuki. MSMEs‘ state of affairs with their biggest auto client manufacturer will bound to get a major dent. It is reported that only in Gurgaon, Manesar and Faridabad close to 15,000 MSMEs are associated with the Maruti Suzuki. These MSMEs are doing various kinds of job work, fabrication and contractual manufacturing for Maruti Suzuki India. For these MSMEs Maruti’s business holds over 90% of their total business. So their economic cycle is bound to get broken. And it is also noteworthy that these respective Manufacturing MSMEs have their own ecosystems of vendors, job workers and micro size manufacturing units, apart from their own employees. So with this Maruti Suzuki’s sales outbreak, it can be easily analysed that an entire automobile ecosystem of Delhi NCR region which comprises of over 400,000 people including the direct employees and associated third parties will have to face tough economic crisis. However, all of this is because of the zero sales reported by Maruti Suzuki in April 2020 Month.
The company had zero sales in the domestic market in April 2020, MSI said in a statement.
This was because in compliance with the Government orders all production facilities were closed, it added The company, however, exported 632 units from Mundra port following the resumption of port operations.
The company said the units were dispatched ensuring all safety guidelines.
Notably, Prime Minister Narendra Modi announced the lockdown from March 25, 2020. The lockdown was supposed to have extended till April 14, but chief ministers across the country urged the prime minister to extend the lockdown. It is now supposed to end on May 3 i.e. on Sunday.
However, despite this, certain states are still extending the lockdown further.
Barring essential services, every thing else is shut down. People have been advised to stay at home and not step out unless it’s absolutely necessary.