After historic April low, May hints gradual recovery for auto sector amid crisis5 min read . Updated: 02 Jun 2020, 11:53 AM IST
Crippled by continuous lockdown over the Covid-19 crisis, the carmakers are yet to see a revival in demands for passenger vehicles.
For the Indian automobile companies, May could not possibly have been worse than April. The forgettable first month of the first quarter saw barely any passenger cars sold due to lockdown amid the Cover-19 crisis. In contrast, May has provided some relief for the carmakers trying to overcome the mammoth challenge to get back to usual business of making and selling cars.
With most customers still preferring to stay away from showrooms or risking investment in a new vehicle amid the financial doldrum, sales figures for passenger vehicles in May shows it is going to be a long road to recovery for carmakers in India.
India’s biggest carmaker Maruti Suzuki on Monday announced that it had sold a total of 18,539 units in the month of May. This included 13,865 units in the domestic markets and 23 units to other OEM.
According to the statement, the company exported 4,651 units following resumption of port operations at Mundra and Mumbai ports
"The company resumed its manufacturing operations post lockdown strictly in accordance with the government regulations and guidelines, from May 12 at its Manesar facility and from May 18 at its Gurugram facility," the company said in a statement.
"Production also resumed at Suzuki Motor Gujarat Pvt Ltd (SMG) from May 25. SMG manufactures cars on a contract basis for Maruti Suzuki. Likewise, the company's showrooms opened in accordance with the Centre and state guidelines in a graded manner across different cities," the statement said.
"The remaining showrooms would open in due course if they are not in containment zones or if not specifically restricted by any local guidelines."
Korean car manufacturer Hyundai Motor announced it had sold 6,883 units in the domestic market in the month of May and that another 5,700 units had been exported in the same period. After what was a tumultuous April for almost every automotive manufacturer, sales figures from May come as some respite even if these are only a pale shadow of pre-Covid-19-times.
Commenting on the May sales performance, Tarun Garg, Director, Sales, Marketing and Service, Hyundai Motor India, said, "In an extremely challenging market environment, HMIL made a humble beginning towards normalcy by registering cumulative sales of 12,583 for the month of May 2020."
"... 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."
Mahindra and Mahindra reported a massive decline of 79 per cent in its total vehicle sales last month to 9,560 units against 45,421 units sold in May 2019. The company also reported domestic sales of 9,076 units, lower by 79 per cent from 43,056 units sold in May 2019.
Veejay Nakra, Chief Executive Officer, Automotive Division, Mahindra and Mahindra said: "Our performance during May has been muted, due to the challenges the industry is facing. We have opened 70 per cent 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 said the company sold a total of 1,639 units in the month of May 2020. "The market has been slow and with demand being less, we have been able to wholesale only 20 per cent of what we would have clocked under a normal situation," said the Indo-Japanese joint venture's Senior Vice President for Sales and Services Naveen Soni in a statement.
Under such challenging conditions, Honda Cars reported that it had dispatched 375 units in the domestic market in the month, down from 11,442 units in the same month a year ago.
Honda Cars highlighted challenges related to lockdown 4.0 and operational restrictions for the low sales numbers. "Covid-19 pandemic has been an unprecedented situation where HCIL and our dealer network has been responding in the best possible manner," said Rajesh Goel, Senior Vice President and Director, Marketing & Sales, Honda Cars India Ltd. "During May, after roll out of several relaxations from central and state government, we focused on re-opening of our network while ensuring strict adherence to the sanitisation, safety and distancing guidelines for Covid-19 prevention."
MG Motor India announced it had retailed 710 units in the month of May after resuming work at its Halol plant in Gujarat at 30% capacity utilisation.
Citing supply chain constraints, MG highlighted the challenges faced in the month. "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," said Rakesh Sidana, Director - Sales, MG Motor.
In the two-wheeler segment, Hero MotoCorp sold 112,682 units in May, a decline of around 83 per cent year-on-year.
"Ensuring stringent safety protocols for employee and customer well-being, Hero MotoCorp scaled-up production in a graded manner during the month, after reopening three of its manufacturing facilities on May 4," the company said in a statement.
"All six manufacturing facilities of the Company in India - at Dharuhera and Gurugram in Haryana, Haridwar in Uttarakhand, Neemrana in Rajasthan, Halol in Gujarat and Chittoor in Andhra Pradesh - have now resumed operations with limited production."
The company's manufacturing facilities at global locations - one each in Colombia and Bangladesh - will restart production during the month.
Royal Enfield also reported total sales of 19,113 units last month, a drop of 69 per cent compared to May, 2019. "In line with expectations, the May sales data for 2W OEMs contracted sharply on YoY basis amidst lockdown and gradual resumption of business activity," Shamsher Dewan, VP and Sector Head, corporate ratings, ICRA was quoted by IANS.
ICRA has predicted a maximum of 25 per cent decline in demand of passenger vehicles in the current fiscal due to multiple lockdowns. However, it also said that it can turn to stable from negative if demand environment improves on a consistent basis over the next 12-18 months.
(With input from agencies)