Due to the lockdown, the maker of steering systems had no sales in April 2020.NEW DELHI: Steering systems and automotive drivetrain component manufacturer, JTKET hopes that the business situation should normalise during third and fourth quarter. However, in view of lockdown, the profitability during the first quarter of April to June is likely to be adversely impacted, the company said in a letter to the Bombay Stock Exchange.
However on-demand front the Tier-I component supplier believes that the scale of operations will actually depend upon the activity in the auto sector and the revival in the sector amids the corona pandemic.
It said, “the current domestic volume of car sales is quite low which is negatively impacting the production volumes of the company. In the short term, it is therefore expected that manufacturing activity will be well below normal. We expect demand to improve in the third quarter and normalise by the fourth quarter.”
Indian carmakers are likely to report the worst demand decline in almost three decades in the first quarter which will end in June, with wholesale dispatches and retail sales of passenger vehicles (cars and UVs) contracting drastically because of the comprehensive lockdown to prevent the coronavirus from spreading.
Due to the lockdown, the maker of steering systems had no sales in April 2020. As the auto sector got permission to restart manufacturing activity in the month of May; it has initially taken several days to achieve the readiness of man and machines for the start of manufacturing activity.
Moreover, the actual production will depend upon demand from consumers which in the current scenario may take little time to pick up. With this scenario, it expects a major decline in manufacturing activity in the sector in the first quarter of the current financial year.
The leading supplier of Steering systems to segment leader, Maruti Suzuki India also said that there are no liquidity concerns as we have sufficient Banking limits available. The company has been regular in meeting its interest and principal repayment obligations towards its bankers. The company has paid all its vendors on time.
It has also paid full salaries to its on a roll and off roll employees for the month of March, April, and May 2020. The salaries for the month of June 2020 shall be released on time.