JK Tyre and Industries Ltd on Tuesday announced pay cuts of 15-25% for its its top management to deal with the adverse impact of COVID-19 on the company’s financials.
“Chairman and whole time directors of JK Tyre have taken a voluntary cut in their salary of 25% and other senior management personnel have also taken a voluntary reduction in their salary by 15-20%. Pay cut also applies to its global operations," said Raghupati Singhania, Chairman and Managing Director, JK Tyre and Industries Ltd.
This is the second time in less than a week that an Indian tyre manufacturer has announced salary cuts for its employees.
Apollo Tyres Ltd. had also announced a voluntary reduction in pay last week owing to the impact of COVID-19 on the automotive and tyre industry.
Also See: Apollo Tyres Leadership Takes A Voluntary Pay Cut
There's no doubt that tyre manufacturers have borne the brunt of the slump in the automotive industry which has been further aggravated by the pandemic. A major lock down for 21 days was enforced by the government just yesterday and things might get worse. Factories and showrooms are closed and there will be virtually no vehicle or automotive equipment that will be sold in India for the next 21 days. Even after the lock down is over there are chances of a weak customer sentiment as people might be reluctant to spend in order to recover from the economic crisis. Thus, we expect demand to stay low even when the lock down ends.
Talking about the current scenario, Mr. Singhania had further added, "we are witnessing unprecedented difficult times, with both sales and profitability getting impacted due to coronavirus."
“Tyre Industry has been passing through difficult times owing to unprecedented slow down and disruption in supply chain. This has been aggravated by the impact of COVID-19 pandemic. It is anticipated that the situation may worsen further," the company said in a statement.
