If April was a complete washout, then May, with partial re-opening of production and limited days of sales means numbers are at a record low.
01 Jun 2020 | 12318 Views | By Nilesh Wadhwa
The Indian automotive industry has been engaged in a two-pronged fight, one against Covid-19 pandemic and lockdown, other with getting customers to go ahead with their vehicle purchase decision.
Carmakers in India have been facing the worst of an unprecedented scenario with vehicle sales for the last two months ...
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The Indian automotive industry has been engaged in a two-pronged fight, one against Covid-19 pandemic and lockdown, other with getting customers to go ahead with their vehicle purchase decision.
Carmakers in India have been facing the worst of an unprecedented scenario with vehicle sales for the last two months badly down. While the month of April saw domestic vehicle sales plummet to complete zero, the sales number for May, when the automotive industry witnessed partial opening of manufacturing and sales, the result shows that the road to recovery is a long-battle that will need multi-pronged strategies and persistence to drive ahead.
The country’s largest carmaker Maruti Suzuki India, which resumed manufacturing operating at its Manesar facility on May 12 and Gurgaon plant on May 18, reported selling 13,865 units in the domestic market, a drop of 88.54 percent YoY (May 2019: 121,018 units) the lowest monthly sales in a very long time. On the export front the carmaker shipped 4,651 units.
Hyundai Motor India, the second biggest carmaker in the country by sales volumes reportedly dispatched 6,883 units in the domestic market, a drop of 83.8 percent (May 2019: 42,502 units). The company resumed operations at its two plants in Chennai, Tamil Nadu, on May 8, and is presently functioning with over 850 showrooms and 1,000 workshops also being back in operations across the country and dealing directly with customers on the ground. For exports the company managed to ship around 5,700 units in the month.
One of India’s leading SUV maker Mahindra too witnessed a similar scenario with sales of 3,867 units in the month, a drop of 81 percent (May 2019: 20,608 units). Commenting on the performance, performance, Veejay Nakra, CEO, Automotive Division, Mahindra & Mahindra said, “Our performance during May has been muted, due to the challenges the industry is facing. We have opened 70 percent 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.”
Toyota Kirloskar Motor reported sales of 1,639 units in the domestic market, a significant drop of 99.98 percent (May 2019: 12,138 units), which can be seen as a a very truncated month given that the carmaker resumed production only on May 26. Commenting on the sales last month, Naveen Soni, senior vice-president, Sales & Service, Toyota Kirloskar Motor said, “We are thankful to the government as well as to our supplier and dealer partners who have enabled us resume production last month. We are conscious of the dealer business conditions in various parts of the country and we have been prioritising production at our end as per dealer requirements, both in terms of quantity as well as the grades that they require. 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 (sale from dealer to customer) have been much higher when compared to wholesales (TKM sales to dealers), thereby helping us reduce the month closing inventory levels at dealerships. We have also seen a significant surge in customer orders and enquiries online, through digital platforms.”
"We have now resumed operations in more than 300 Toyota outlets across the country, with ongoing sales operations in close to 220 outlets and service operations in more than 230 outlets. From sales and service point of view, business is ramping up and we are exceeding 50% of our normal capacity from the open outlets," added Soni.
One of the youngest entrants in the country, MG Motor India reported sales of 710 units, despite disruption in its supply chain. The company says it resumed production at its Halol manufacturing plant with approximately 30 percent capacity utilisation, and has 65 percent of its showrooms and service stations operational with reduced manpower. Commenting on the sales performance, 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. The production loss notwithstanding, our front-end retail operations continue to operate with less-than-normal staff strength. At these times, we remain connected with our customers waiting for delivery of the Hector and continue to prioritise deliveries with supply chain improvements in June. We hope to restore normalcy from July onwards. All of our vehicles' stocks across channels and dealership inventory are BS-VI units.”
With the easing of the lockdown in several parts of the country, and opening up of manufacturing and retails, India Auto Inc will look to come out with innovative marketing and sales methods to woo out the Indian consumers to drive sales. Consumers can expect to gain the best of schemes and offer to drive home their next vehicle. Keep watching this space for more updates.
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