Covid-19 dents auto industry’s March off-take
New Delhi/Chennai, April 1 (IANS) Hit hard by the Covid-19 outbreak that has dampened economic activity and low consumer sentiment, automobile manufacturers’ March sales dwindled.
The sector’s sales during the month were impacted mainly due to the suspension of operations in view of the coronavirus crisis and the nationwide lockdown.
The Covid-19 outbreak and the consequent lockdown has resulted in massive economic upheaval. While on one hand, factories and businesses are shut, consumer sentiment is also marred with the fears of uncertainty over the current health crisis.
Company-wise, passenger car major Maruti Suzuki India reported sales of only 83,792 vehicles in March. However, March’s sales figures cannot be compared on a YoY basis, due to the prevalence of extraordinary circumstances, it said.
The company had sold a total of 1,58,076 vehicles in March 2019. If both the figures are compared, then March 2020 sales comes lower by over 47 per cent on a YoY basis.
Domestic sales during the month were recorded at 76,976 units, 47.9 per cent lower than the 1,47,613 units it sold during the same period last year.
Another auto major, Hyundai Motor India reported sales of only 32,279 units in March.
The company’s overall sales during the like period of last year were substantially higher. According to the company, its domestic sales stood at 26,300 units, while exports were at 5,979 units.
Similarly, Mahindra & Mahindra reported a massive decline of 88 per cent in its total vehicle sales in March to 7,401 units due to the Covid-19 outbreak. The company had sold 62,952 units in March 2019.
Its domestic sales last month stood at 6,130 units, 90 per cent lower than 59,012 vehicles sold in February 2019, the company said in a regulatory filing.
Segment-wise, in passenger vehicles which includes SUVs, cars and vans, Mahindra sold 3,384 vehicles during the month under review, compared to 27,646 in March 2019.
In the commercial Vehicles segment, the company sold 2,325 vehicles in March 2020, as against 24,423 units in March 2019.
Additionally, exports for March 2020 declined by 68 per cent on a YoY basis to 1,271 vehicles.
Veejay Ram Nakra, Chief Executive Officer, Automotive Division, M&M said: “Our performance in March has been muted on account of the impact of the current lock-down related to Covid-19 and the disruption in our BS-VI ramp-up plan.”
“The latter was planned between February and March but was affected due to the challenges of parts supply from global and local suppliers. We have been able to clear our BS-IV inventory, but for fewer than 100 vehicles. However, there are many vehicles that are sold, but not yet registered because of the closure of RTOs.”
Another automobile major, Tata Motors’ sales in the domestic and international market, for the month of March 2020 stood at 12,924 vehicles compared to 74,679 units during the corresponding month of 2019.
The company’s domestic sales plunged by 84 per cent to 11,012 units from 68,727 units sold in March 2019.
“Domestic sales in March 2020 was 5,336 units, deeply impacted by the Covid-19 lockdown as well as the planned transition to BS-VI. Retail sales were significantly ahead of wholesales,” said Girish Wagh, President, Commercial Vehicles Business Unit, Tata Motors.
“Almost all BS-IV vehicles in the ecosystem have been retailed, however, some await registration which was halted due to the lockdown. This will be cleared in the window provided. Productionization of BS-VI vehicles was on track and we have wholesaled the initial few BS-VI vehicles.”
Toyota Kirloskar Motor said: “Having successfully liquidated all BS-IV stocks even at the dealership level, TKM sold a total of 7,023 units of BS-VI vehicles to its dealers in the month of March 2020.”
“To lessen the burden on its dealers, TKM withheld sales by 50 per cent for the month of March 2020, just ahead of the 21 days national lockdown called by the Government of India. The company also exported its last batch of 999 units of the Etios series last month thus clocking a total of 8,022 units.”
Furthermore, Kia Motors India sold 8,583 units for the month of March 2020, while Honda Cars India’s monthly sales stood at 3,697 units in March 2020.
“Pandemic has snuffed the air out of the industry and has significantly disrupted sales and production of vehicles right from components not being available to vehicles offtake at the dealers end,” said Sridhar V, Partner, Grant Thornton India LLP.
“The signs of slowdown which was visible in February became worse with the lockdown announced in March. Tough times like this will lead to vehicle manufacturers to take tougher decisions and assuming normalcy is restored soon after the removal of lockdown, the business could take a quarter or two to revive and breathe normally.”
Suman Chowdhury, President – Ratings at Acuite Rating s & Research, said: “It is not surprising that the economic lockdown triggered by Covid-19, has sharply impacted the sales in the automobile sector which was already reeling under the effect of a structural slowdown.”
“While the leading passenger vehicle players have seen a drop in factory despatches by over 40 per cent, the decline is far sharper for CV players and reflects not only the shutdown of the operations from the last week of March but also the production constraints in BS-VI vehicles due to global supply chain disruptions and above all, a highly weak demand environment.”
–IANS
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