Indian auto industry fears slump in sales as Covid-19 lockdown returns

Memories of a horrific April, 2020 has returned to haunt the Indian auto industry as several states have imposed strict lockdown-like restrictions amid rising Covid-19 cases across India. Several carmakers have expressed their fear that the horrors of April, 2020 may return as business is likely to take a hit due to curfew imposed in many places.

The auto industry has witnessed a healthy growth in the passenger vehicle segment last month with a gain of 28 per cent. It was the kind of improvement that raised hopes in the industry of a turnaround after Covid-19 hugely impacted sales last year.

The month of April last year will go down in the history of Indian automobile industry as the first month when none of the manufacturers could sell even a single unit due to the lockdown imposed in the last week of March, 2020 that continued till summer last year.

As fresh restrictions kick in, carmakers feel it could turn back the clock to last year. According to India's largest vehicle manufacturer Maruti Suzuki India Limited, auto sales are directly related to the country's economic growth. "The Covid-19 situation deterioration is obviously a negative for customer sentiment and thus has a negative impact on sales," Shashank Srivastava, Executive Director (Sales and Marketing) at Maruti Suzuki India Limited was quoted by news agency PTI when asked about the impact of second wave of the pandemic on vehicle sales.

Many carmakers, like Toyota Motors, feel that the new restrictions will not only impact sales, but also supply and delivery schedules. Naveen Soni, Senior Vice President at Toyota Kirloskar Motor (TKM) was quoted by PTI saying, "We will be able access trends and define numbers only by the end of the month depending on the severity and extension of the restrictions. As of date, we have had a good number of pending orders that had to be carried forward from the month of February and March to April. Therefore, we are striving to meet the customer demand in spite of the local restrictions and lockdowns."

Soni also said, "Our immediate focus is to fasten and streamline the demand and supply processes with more accuracy and manage production, along with faster deliveries making it easier and convenient for customers by reducing the delivery time."

Honda Cars India is also keeping a close eye on the Covid-related developments and its impact on its sales. "Lockdown and weekend curfews will impact sales as showrooms will be shut in some of the markets. We are currently assessing and taking feedback from various cities about its extent," said Rajesh Goel, Senior Vice President and Director (Marketing and Sales) at Honda Cars India.

In March, 2021, the automobile companies in India could sell 2,79,745 units of vehicles. It was a 28 per cent rise over what it could sell in March last year, when the passenger vehicles sales stood at 2,17,879 units before the Covid-19 lockdown had almost completely shut down vehicle sales for some time.

(With inputs from agencies)