Lockdown impact: Vehicle sales down 45% in March

Sale of scooters fell 32% to 2.63 lakh units, sale of motorcycles was down 41.89% to 5.70 lakh units during the month under review

Assembled cars seen at the Maruti Suzuki plant at Manesar.

Total wholesale dispatches of vehicles slumped 45% to over 10.50 lakh units in March 2020 as manufacturers halted production and sale in the last week amid the nationwide lockdown due to the outbreak of coronavirus .

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The automobile industry had dispatched over 19.08 lakh units to dealers in March 2019, as per data released by Society of Indian Automobile Manufacturers (SIAM). Production of vehicles across segments also fell by 33.6% to about 14.47 lakh units during the month as compared to over 21.80 lakh units in March 2019.

“The month of March 2020 was one of the most challenging months for the auto sector as the 21-day lockdown resulted in bringing the production and sales of vehicles to a standstill in the last week. As the revenues took a severe hit, the OEMs struggled on meeting fixed cost and working capital requirements,” Rajan Wadhera, President, SIAM, said.

Stating that before the lockdown the industry was already reeling under severe degrowth and pressure of disrupted supply chain, Mr Wadhera said that the auto industry is losing an estimated Rs 2,300 crore in production turnover for each day of closure.

As per the SIAM data, wholesale sale of passenger vehicles in the country stood at over 1.43 lakh units last month, down 51% from over 2.91 lakh units, while production of these vehicles fell 38.14% to 2.07 lakh units from 3.34 lakh units.

While domestic sales of cars fell 52.12% to 85,229 units, that of utility vehicles and vans declined 44.67% to 51,569 units, and 69.88% to 6,216 units, respectively.

For commercial vehicles domestic sales nosedived 88.05% to 13,027 units from over 1.09 lakh units, while production was down 82.88% to 18,057 units from over 1.05 lakh units in March 2019.

As per the data, sale of two-wheelers fell nearly 40% to over 8.66 lakh units as against 14.40 lakh units in the year-ago month. Production was down by 28.21% to 11.61 lakh units, down from 16.18 lakh units. While sale of scooters fell 32% to 2.63 lakh units, sale of motorcycles was down 41.89% to 5.70 lakh units during the month under review.

“The auto industry is engaged in a dialogue with the government on policy measures which could minimize the impact of COVID on the Indian economy and especially the Indian automobile industry. There would be challenges on the supply side; demand side and also on the issue of availability of finance which would all need to be addressed to bring back growth in the sector,” Mr Wadhera added.

“The automotive sales numbers for March have dipped significantly and with the harvest festival lost during the lockdown, April numbers are also set to be very low. Therefore, it is imperative to restart controlled operations across the automotive value chain from plants to dealerships by laying out guidelines for safe working e.g. in-plant stay of workers, only home delivery of vehicles, etc. Given the huge multiplier effect of the auto industry, this may well be one of the most effective ways to restart the economy,” Ashim Sharma, Partner & Group Head at NRI Consulting & Solutions told The Hindu.

For the full year 2019-20, total domestic vehicle sales stood at over 2.15 crore units, down 18% from more than 2.62 crore units dispatched in March 2019. Passenger vehicle sales last year fell 17.82% to over 27.75 lakh units, while that of commercial vehicles was down 28.75% to over 7.17 lakh units. Two wheelers sales were lower by 17.7% to over 1.7 crore units.