Aftermath of the Chennai floods causes companies like BMW and Ford delays in resuming work

As the floods subside in the city of Chennai, it has left behind a trail of chaos and destruction in its wake that has adversely affected auto manufacturers. The Chennai floods has caused car manufacturers to halt production of vehicles for weeks, causing major losses. Chennai is the production facility for five car manufacturers, out of which two manufacturers – BWW and Ford -have not yet been able to resume work as they are still struggling to have the assembly line back on track. Both the manufacturers have not yet been able to roll out even a single vehicle for the month of December yet.

The heavy downpour, which lasted for around a fortnight and subsided in the first week of December, has translated to a loss in production cost of Rs 1,500 crore till now to the auto industry. With the further delay of Ford and BMW, expect the addition of another Rs 850 crore and Rs 900 crore respectively to the above figure. Both the manufacturers had scheduled maintenance shutdown from the second half of December, but looking at the current scenario it will be factored in the likely production resumption dates.

BMW aims to remain optimistic in spite of facing delay in resuming production. This will probably have a negative impact for the brand, as it has already seen drop of 25-30 per cent in volumes in the past. As for the American manufacturer, the engine assembly department has been operational, but the rest of the assembly line is still not online. With the demand for the new EcoSport and the upcoming Endeavour launch, Ford will face minor delays in having the vehicles ready on time to fulfil the demands.