Maruti Suzuki India shares plunged as much as 8% in intra-day trade on May 18, 2020 to day's low of Rs. 4682.70 per share on the BSE. On Friday, the stock closed at Rs. 5100.65.
This is after the company's chairman RC Bhargava expressed his disappointment over the government's Rs. 20 lakh crore Covid 19 stimulus package. "The Prime Minister in his speech on May 12 had mentioned five pillars as the focus area of the relief package and one of them was demand. But nothing has been specifically done to address that," said R C Bhargava, chairman, Maruti Suzuki India Ltd.
"Possibly the intention is that all the money that is being made available to different sectors and MSMEs will create demand. All of this will take time", he added.
Interestingly even before the coronavirus pandemic, the automobile industry was going through the worst slowdown in more than two decades. Last month it recorded a new low as the industry failed to sell even a single unit of car or 4-wheeler as factories and dealerships remained closed owing to the extended lockdown.
"The immediate concern of the government was to address problems with the small industries, SMEs, the issues with migrant labour and farmers. Frankly, I do not think the intent was to deal with the larger industrial problems at all," he said.
The government did not pay heed to the industry's long-standing demand of reducing taxes on cars and two-wheelers. Though Bhargava on this front stated that reducing taxes at this point in time would not have helped much as production remains low but industry's concerns should not be neglected for such a long span of time.
Meanwhile, the company has resumed manufacturing activity at its Gurugram plant from today. The production at the Manesar facility was restarted on May 12.