The industry has been urging the government to implement a vehicle scrapping policy to create demand, the Kapoor organization said.

NEW DELHI: Sona Sunjay Kapur said that labor supply may pose a challenge for businesses to scale up due to large outflow of migrant labor from the industrial belt.

Sona Comstar, which started operations earlier this month He said that by ensuring the safety of local employees, the company can restart its manufacturing plants in Haryana and Chennai (Tamil Nadu).

“Fortunately, we have a lot of local people so we started working with them and the migrant workers may have gone back. Of course, we are tracking all our employees, but we can’t find them. It’s just. It’s a challenge for the whole supply chain for us to add labor there,” added Kapoor, adding that the company wants to streamline that work and get people back to work.

Sona Comstar is currently working to fulfill export orders as domestic demand has yet to kick in. “Agricultural equipment is an essential service in the U.S. and remains open. At the moment, we are catching up on these orders. In fact, the domestic market has not taken off yet as the supply chain is quite complex.” Kapoor said. With the decline in production in the automobile industry, Kapoor expects the domestic market to decline by 20% this fiscal year. However, the company will continue with its planned capital expenditure of Rs 1.8 billion this fiscal.

Kapoor said the industry has been urging the government to implement the long-awaited vehicle scrapping policy to create demand. Reduction in excise duty on cars to 18% from the current 28% will also boost sales. Kapoor added that it was also important for the government to consider cars as an essential service. We really need to look at cars as an essential service,” he said. If there is a blockade in the future, this start-stop model will be difficult to run (especially because of the complexity of the supply chain).

On a positive note, however, Sona’s Chinese plants are running at full capacity, with demand rebounding after the embargo. “Demand in China has definitely increased. There are a lot of incentives to buy cars. That has certainly helped. Our plants are running at full capacity. That’s a good sign. If we take the right demand creation measures, people will go out and drive, and that means buying cars,” Kapoor said.