Behind festive season hype, auto sector in a world of pain
Vehicle manufacturers and dealers placed big bets on pent-up demand. In its absence, old wounds have reopened.
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Editor's note: On Wednesday, the Union cabinet approved a production-linked incentive (PLI) scheme for 10 sectors to the tune of Rs 1.46 trillion over five years. The automobile and auto components sectors are set to corner a lion’s share of this—roughly Rs 57,000 crore. A timely step for the auto sector, it can be argued. Its performance has a strong correlation to the economy, employs several million people, accounts for 7.1% of India’s gross domestic product and nearly 22% of the manufacturing sector’s GDP. But recent reports in the media have presented a rather rosy picture of the industry staging a strong recovery on the back of a phased relaxation of the lockdown imposed in late March to thwart the spread of COVID-19. Take Hero MotoCorp, the No. 1 manufacturer of two-wheelers in the world, for instance. The company claims to have sold over 800,000 two-wheelers in October, its highest ever sales in a month. Passenger vehicle manufacturers have also touted an overall sales growth of 9.68% in the month gone by, compared to a year ago. So, why then is the …
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