Automobile sales crash as manufacturers suspend operations to tackle COVID-19 second wave

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Sales of automobiles in the local market crashed in strong double-digits sequentially amid the second wave of the coronavirus pandemic as several leading manufacturers temporarily suspended operations to divert industrial oxygen for medical purposes and on account of localised lockdowns imposed by state governments in May.

With majority of auto retail outlets shut and production limited at manufacturing units, industry estimates passenger vehicle makers dispatched about 103,000 units last month – nearly a third of 286,728 vehicles sold in April 2021. Passenger vehicle sales had been muted at around 36,000 units in the same month last year with automakers working at ramping up operations post a covid-induced nationwide lockdown starting March 25, 2020.

Automakers in India mostly report wholesale dispatches from factories and not retail sales to customers.

The country’s largest car maker sold 32,903 units last month, more than double of 13,702 units sold in the year-ago period but nearly a fourth of 135,879 units sold in April 2021. “In May 2021, the company shut production from 1st May through 16th May so as to divert oxygen from industrial use for medical purposes. In May 2020, the company witnessed production disruption owing to lockdowns. Since neither of the two months had normal production, the sales volume of May 2021 are not comparable with May 2020”, Maruti Suzuki said in a statement.

April ’21 May ’20 May ’21 % change over Mar ’21 % change over May ’20
Maruti Suzuki 1,35,879 13,702 32,903 -76 140
Hyundai 49,002 6,883 25,001 -49 263
Tata Motors 25,095 3,152 15,181 -39.5 382
Mahindra 18,285 3,867 8,004 -56 107
Toyota Kirloskar 9,622 1,639 707 -93 -57
MG Motor 2,565 710 1,016 -60 43
Honda 9,072 375 2,032 -78 442

At Korean rival Hyundai Motor India too, while sales last month nearly trebled on a y-o-y basis to 25,001 units, wholesale volumes halved sequentially.

Meanwhile, home grown auto majors

and Mahindra & Mahindra (M&M) saw domestic sales plunge m-o-m sales by 40% (to 15,181 units) and 56% (to 8,004 units) respectively.

Veejay Nakra, chief executive officer, (automotive division), M&M, said the company is witnessing a strong growth momentum for its entire product portfolio. “With the cases coming down and gradual opening up of markets, we foresee strong demand rebound. We are working closely with our supplier partners to manage supply chain issues and meet the market demand”, Nakra added.

Toyota Kirloskar Motor – which had announced a maintenance shutdown at its facilities at the end of April – sold 707 units last month. Naveen Soni, senior vice-president, TKM said, “Last month witnessed no production at our plants in Bidadi as well as minimal sales owing to the much needed restrictions & sporadic lockdowns in different parts of the country. Hence comparing last month’s performance to that of May 2020 would be highly skewed, as May 2020 had witnessed a gradual restart of both operations and sales. More so for TKM, as even before the restrictions were announced in Karnataka, we were well within our planned annual maintenance shutdown, thereby adding onto the number of non-production days.”

However, Soni informed the overall market situation as well as consumer sentiments are better than May 2020. “We also anticipate that factors like ‘pent up demand’ and the demand for personal mobility will continue to be quite significant once the markets open as consumers will want to own their vehicles instead of using shared or public mobility options. A testimony to this is the fact that we have a very healthy number of pending orders and there has been no significant order cancellation against the orders. However, we will be able to take a better stock of the situation once the restrictions are relaxed”, he said.

In the commercial vehicle segment, Tata Motors sold 9,371 units last month – a more than six-fold increase over 1,266 units sold in the year-ago period. However, sales declined sequentially by more than a third to 14,435 units sold in April 2021. Chennai-based

saw sales double to 2,738 units as against 1,277 sold in May 2020. However, sales fell on a month-on-month basis by 66% over April. VE Commercial Vehicles sold 704 units in the local market last month, compared to 455 units sold in the year-ago period.

In the two-wheeler segment, Pune-based Bajaj Auto reported an increase of 54% to sell 60,342 units last month. However, monthly sales fell sequentially by 52% over 126,570 units sold in April 2021.

sold 52,084 units in the local market as against 41,067 units in May 2020.

Tractors sales remained mostly steady with market leader Mahindra reporting a moderate 5% decline in sales of farm equipment last month at 22,843 units. However, a bumper rabi harvest, record procurement, gradual opening up of mandis and predictions of a normal monsoon are expected to pave the way for growth in tractor sales in the upcoming season.

Hemant Sikka, president (farm equipment sector), M&M, said, “In May, COVID spread in rural markets led to stringent lockdowns, leading to deferment of tractor purchase and limited operations at dealerships. While state specific lockdowns and localized restrictions continue, it is heartening to see the Covid cases reducing sharply. This is leading to sharp improvement in farmer sentiments and green shoots of recovery are visible, especially since the last week, as farmers start preparing their land for the upcoming Kharif crop season.”

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