The need of the hour would be to boost demand.

Accelerate infrastructure spend of Rs. 1.7 Lakh Crore to provide immediate impetus to the economy.

- Vipin Sondhi - Managing Director & CEO, Ashok Leyland Limited

Tell us about the challenges faced due to COVID-19 and its impact on the Commercial Vehicle sector and overall economy.

The Covid-19 crisis has brought the entire economy to a near standstill. The government will have to manage the state of the economy, especially for the stressed sections of the society - the daily wage earners, the agriculture sector, and the MSMEs. MSMEs will be needed to be supported as they are the backbone of Indian industry and form the key element of product supply chain - be it agri-processing, textiles, or auto-ancillaries. Some measures of support to be considered would be:-       

Easy access to working capital and liquidity through banks and NBFC's; providing interest free and collateral free loans; introduction of an incentive for MSMEs to help them pay salaries and wages to their employees in these times; extension of the NPA recognition period from 90 days to 360 days; ensuring that all pending payments to industry / MSMEs are cleared immediately by the government departments and PSUs. We at Ashok Leyland have prioritized settlement of dues to MSME's and have instituted a process of paying the MSMEs even prior to the statutory payment due date.  

How do you assess the impact on the CV sector?

The CV sector is expected to witness an adverse impact in the short-term on account of reduced demand. The need of the hour would be to boost demand. Some of the demand side interventions to trigger consumption (Individuals, Government & Corporates) would be:- Accelerate infrastructure spend of Rs. 1.7 Lakh Crore. (already allocated in budget) to provide immediate impetus to the economy. Significant amount of this money can go towards to each of the 700 districts in the form of low cost housing and road construction.              

• Building agriculture warehousing and cold storage chains near farm gates.
• Scrappage policy for automotive (>15 years) to incentivise new purchases.
• Special package required for airlines, bus operators, hospitality, tourism, and retailers.
• Export stimulus and re-opening of port operations.

These would be some of the measures which could boost demand.       

With depreciation in sales, what will be your revival strategy to handle the situation post the lockdown?

The economy needs to turn around and in turn that will help the CV sector sales. An economic support package would be critical to kick-start the economic activity after this long period of disruption. Supply chains need to be re-started, migrant labour needs to come back to work (in a systematic and safe manner), and consumer demand needs to be triggered. There should be gradual opening of other sectors to revive economic activity and enable employment (especially for casual, and daily wage workers). Clear operating guidelines should be provided to ensure social distancing and preventing spread of the virus.  Unless the eco-system through the value chain opens, a truck cannot be produced or sold.                   

The COVID-9 wipeout has impacted laborers immensely. What are the measures being taken to support them?

Migrant labour needs to be cared for and we should take all necessary measures to ensure that they are provided with food and shelter. In our case, our manpower is predominantly from local areas and our contract manpower are also around premise and since we have been extending support by means of salary as well as food and health care, we should be able to ramp up as soon as we are ready to restart. On resumption we will ensure that we provide mandatory health screening for migrant labour once they report for duty, we are also setting up quarantining facilities for migrant labour, if COVID-19 symptoms are identified.

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