Business

Auto sector shows some signs of life

Halt and go: Automakers sold sales about 37,000 PVs in May 2020 as against a sales of over 2.39 lakh in the year-earlier period.

Halt and go: Automakers sold sales about 37,000 PVs in May 2020 as against a sales of over 2.39 lakh in the year-earlier period.   | Photo Credit: Reuters

Post lockdown, carmakers resume operations on the slow lane

The Indian automobile sector saw some demand returning in May after zero sales in April as partial operations resumed, albeit with supply disruptions and labour issues, after almost two months of nationwide lockdown.

The wholesale figures for May are only a fraction of monthly sales that automobile manufacturers saw in the pre-COVID-19 months. As per industry estimates, wholesales of passenger vehicles (PVs) stood at about 37,000 units in May 2020 against more than 2.39 lakh in May 2019.

The country’s largest carmaker Maruti Suzuki sold a total of 18,539 units in May 2020. This included wholesales of 13,865 units in the domestic market, and sale of 23 units to other OEMs. The company exported 4,651 units following resumption of operations at Mundra and Mumbai ports, it said.

Maruti Suzuki resumed manufacturing operations at its Manesar facility May 12 onwards and at Gurugram facility May 18 onwards. The production at Suzuki Motor Gujarat, which manufactures cars on a contract basis for Maruti Suzuki, also resumed May 25, onwards.

Hyundai Motor India said in May it received close to 15,000 customer bookings across models and about 11,000 new cars were delivered to customers. With over 850 showrooms and almost 1,000 workshops opened, the company posted a cumulative sales of 12,583 units last month. Tarun Garg, director (sales, marketing & service), Hyundai Motor India said, “In an extremely challenging market environment, HMIL made a humble beginning towards normalcy...we have prepared ourselves to welcome our customers back in this New Normal while ensuring adherence to safety guidelines at our showrooms and workshops and expedite economic recovery.”

Honda Cars dispatched 375 units to dealers in the domestic market. Rajesh Goel, senior vice-president and director, marketing and sales, Honda Cars India Ltd., said, “COVID-19 pandemic has been an unprecedented situation....Against all odds, our dealers have now been able to operationalise almost 280 facilities pan India. As a result, we were able to deliver more than 1,900 units to our customers. The domestic wholesales last month was, of course, quite limited due to the negligible inventory available at our factory before the lockdown.”

Mahindra & Mahindra sold a total of 9,076 vehicles in the domestic market, including 3867 passenger vehicles, 5179 commercial vehicles and 30 three wheelers. Exports stood at 484 vehicles.

Veejay Nakra, CEO, automotive division, M&M Ltd., said, “Our performance during May has been muted, due to the challenges the industry is facing. We have opened 70% of our dealerships and retail sales have begun. We are seeing initial traction for our small commercial vehicles and SUV brands such as the Bolero and Scorpio. As new lockdown norms are being announced, we are hopeful of demand gaining traction in the coming months.”

Meanwhile, Toyota Kirloskar Motor (TKM) said it sold a total of 1,639 units in May 2020. The company said while by mid-May, almost 60% of its dealerships were operational, it did not comprise of the key metropolitan markets. Naveen Soni, senior vice-president, sales and service, TKM said, “The market has been slow and with demand being less, we have been able to wholesale only 20% of what we would have clocked under a normal situation. However, retail sales (sales from dealers to customers) have been much higher compared with wholesales (TKM sales to dealers), thereby helping us reduce the month-closing inventory levels at dealerships.”

Relatively newer entrant MG Motor India said it sold 710 units in the retail market during the month. Rakesh Sidana, director, sales, MG Motor India, said, “Supply chain disruption coupled with stricter credit financing along with non-operation of some dealerships due to the lockdown have impacted our sales in May. We hope to restore normalcy from July onwards.”

Two-wheeler sales

In the two-wheeler segment, market leader Hero MotoCorp said it dispatched 1,12,682 units in May 2020 and its nearly 5000 customer touch-points have re-opened. “These outlets, which contribute 85% of the Company’s domestic sales, retailed more than 160,000 units of motorcycles and scooters during the month of May, driven by demand in the semi-urban and rural markets, with BS-VI vehicles witnessing positive customer response.”

TVS Motor Company said it was seeing a progressive opening of dealerships across the country and overseas in the last two weeks of May, along with a steady pick up in retail customers over the past few days. “During the month of May 2020, the company registered domestic two-wheeler sales of 41,067 units.”

Royal Enfield posted sales of 19,113 motorcycles in May 2020, with domestic sales of 18,429 units.

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Printable version | Jul 11, 2020 1:42:49 AM | https://www.thehindu.com/business/auto-sector-shows-some-signs-of-life/article31725446.ece

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