Covid-19: Automakers set aggressive cost cutting targets, reduce capex

TVS Motor Co is continuing with its cost reduction efforts of previous quarters, the company's management told analysts last month

Automakers have set aggressive cost curtailment targets and announced cut in capital expenditure as they seek to remain profitable amid low output and uncertain demand outlook. Auto plants across the country are running at 30-50 per cent capacity as manufacturers continue to grapple with supply chain and manpower related issues. Fewer number of working hours and social distancing are also weighing on overall costs.
 

A poor operating leverage, which came on back of lower volumes and high costs, singed earnings of companies in the March quarter of 2020-21 financial year even as outlook for the quarters ahead look remains unclear