The nationwide lockdown announced in March due to the coronavirus pandemic and subsequent extensions have put immense strain on cash reserves of the auto sector. With zero vehicle sales in April -- a first of its kind -- the industry has a long road to recovery.

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After four weeks of shutdown, the government directed auto companies to restart operations in a phased manner. However, the move has failed to uplift sentiments of the industry as there is no demand.

Most OEMs believe that any meaningful production ramp up will only be possible when dealerships are allowed to operate and the vendor network is restored to ensure continuous supply of components, said Nirmal Bang.

Moreover, all auto dealers and vendors are currently suffering from a long list of pending dues and stock piles that need to be sold first. As all automakers have held production, they are now prepping up facilities by carrying out maintenance works, laying out safeguarding measures, taking year end stock counts and relooking at supply chains, the brokerage said.

Dealers who had to shut showrooms are using this time to enhance their systems, conduct audits and maintenance, the brokerage said in a report, which pointed out that OEMs were grappling with other issues like unavailability of raw material, workforce, transportation and drivers.

Seeing the long list of issues in the auto industry, many analysts believe that it would take a few quarters for the sector to be return to normal.