June brings hope as auto sales improve, still far from pre-Covid levels
Major automobile manufacturers, including Maruti Suzuki India, Hyundai, Toyota and Mahindra & Mahindra, on Wednesday reported big dip in June sales, though fared better as compared to May as companies gradually ramped up operations after relaxation in lockdowns.
The country's largest carmaker Maruti Suzuki India (MSI) reported 53.7 per cent drop in domestic sales at 53,139 units last month, as against 1,14,861 units in June 2019.
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Its June performance, however, got better than May when it had posted domestic sales of 13,888 units.
"On the customer side if you look at parameters which reflect demand pattern which are enquiries, bookings and retails, there I think we have reached levels 80-85 per cent of the normal," Maruti's Executive Director Marketing and Sales Shashank Srivastava told PTI.
It means "there is quite a good pick up in demand mainly due to pent-up demand" as there was no retail in April and very less in May, he said adding that June was in that sense more representative month because showrooms were open entire month.
With sales demand reviving, he said, the companies are now also looking at ramping up production.
Last month, sale of company's mini cars comprising Alto and WagonR stood at 10,458 units as compared to 18,733 units in the same month last year, down 44.2 per cent.
Sales of compact segment, including models such as Swift, Celerio, Ignis, Baleno and Dzire, declined 57.6 per cent to 26,696 units as against 62,897 cars in June last year.
Similarly, sales of utility vehicles, including Vitara Brezza, S-Cross and Ertiga, declined 45.1 per cent at 9,764 units as compared to 17,797 in the year-ago month.
Hyundai Motor India reported dip in domestic sales last month at 21,320 units as against 42,007 units in June 2019.
Similarly, Toyota Kirloskar Motor (TKM) saw domestic sales plunge 63.53 per cent in June at 3,866 units as against 10,603 units in the same month last year.
“With demand gradually coming back in the market and with strong support from our dealer partners as well as the hard work of our SBUs (Strategic Business Units), we have been able to keep up with customer expectations. Thanks to our special financing offers and buy back offers which has also helped bring customers back to dealerships," TKM Senior Vice President Sales and Service Naveen Soni said.
The company is also seeing a visible growth in online enquiries as well as bookings, he added.
Homegrown auto major Mahindra & Mahindra saw domestic sales drop by 53 per cent to 18,505 units last month, as against 39,471 units in June 2019.
"The automotive industry has started to see recovery both in the passenger and small commercial vehicle segments. This has been led primarily by rising rural demand and movement of essential goods across the country," said Veejay Nakra, chief executive officer, Automotive Division, M&M Ltd.
MG Motor India said it retailed 2,012 units in June.
In the two wheeler segment, market leader Hero MotoCorp reported 26.88 per cent dip in sales last month at 4,50,744 units as compared to the same period of last year.
The company's dispatches last month, however, grew four-fold when compared to May this year.
The company had sold 6,16,526 units in June 2019 while it despatched 1,12,682 units in May 2020.
"We have demonstrated phenomenal leadership quality and tenacity to clock a sharp vertical growth in our sales at a time of massive disruption and uncertainty," Hero MotoCorp Chairman Pawan Munjal said.
Sales of over 4.5 lakh two-wheelers in a highly disrupted month is also a clear signal of the resilience of the Indian economy to be able to revive in the face of any adversity, he added.
"This has vindicated our strong belief in the robust fundamentals of the Indian economy," Munjal said.
He added that a major part of the market demand is emanating from the rural and semi-urban markets, which have been helped to a large extent by the various stimulus packages rolled out by the government.
"A combination of multiple factors, including the forecast of a normal monsoon, a bumper rabi crop and the upcoming festive season are expected to keep the momentum going over the next few months," Munjal noted.
TVS Motor Company reported 36 per cent dip in domestic two-wheeler sales at 1,44,817 units last month as compared to 2,26,279 units in June 2019.
"The market is opening up gradually post the lockdown, and we are witnessing a positive uptake in both domestic retail as well as exports," the company said.
The company faced supply chain constraints in June. However, it has undertaken various countermeasures, some of which have started yielding results in June itself, it added.
TVS Motor expects to overcome these issues in the month of July, it noted.