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Wholesale dispatches of PVs dip in May amid covid curbs

The decline was driven by a 70.5% drop in sales of passenger cars to 41,536 units and a 58.5% fall in utility vehicles sales to 45,158 units in May. (Photo: Reuters)Premium
The decline was driven by a 70.5% drop in sales of passenger cars to 41,536 units and a 58.5% fall in utility vehicles sales to 45,158 units in May. (Photo: Reuters)

  • An exponential surge in covid-19 cases across the country and the consequent lockdown measures by states have led to a sharp decline in domestic wholesale dispatches of automobiles across categories for the second consecutive month in May on a month-on-month (m-o-m) basis

NEW DELHI: An exponential surge in covid-19 cases across the country and the consequent lockdown measures by states have led to a sharp decline in domestic wholesale dispatches of automobiles across categories for the second consecutive month in May on a month-on-month (m-o-m) basis.

Sales of passenger vehicles decreased by 66.34% on a m-o-m basis to 88,045 units in May, as a result of a 70.5% drop in sales of passenger cars to 41,536 units and a 58.5% decline for utility vehicles to 45,158 units, according to sales data released by Society of Indian Automobile Manufacturers (SIAM) on Friday.

Maruti Suzuki India Ltd, the country’s largest car maker, reported a 74.2% m-o-m decline in sales to just 35,293 units during the month. The country’s second-largest vehicle manufacturer, Hyundai Motor India Ltd, also reported a drop in vehicle dispatches by 48.9% to 25,001 units.

Mumbai-based car maker Tata Motors saw passenger vehicle wholesale fall by 39.5% to 15,181, while Mahindra and Mahindra Ltd’s dispatches also dropped by 56.2% to 8,002 units.

The auto industry came under pressure from the first week of April when Maharashtra began strict lockdown measures. Delhi, Haryana, Karnataka, Tamil Nadu, and others followed suit. Maruti Suzuki, Hero MotoCorp Ltd, and Hyundai were among manufacturers who either stopped production or reduced output significantly. Automakers such as Bajaj Auto Ltd continued to operate with limited capacity to meet export orders.

Most automakers resumed operations from the middle of May. following a steady drop in infections, especially in north and south India.

Vehicle sales are usually compared on a corresponding basis. However, in April last year automakers had to close down their respective factories and showrooms, as the Centre imposed a stringent nationwide lockdown from 25 March. Subsequently, operations remained suspended till the first week of May and in some cases early June.

Wholesale of two-wheelers also fell by 52.52% m-o-m to 410,757 units in May as the spread of covid-19 infections in rural areas led to a sharp fall in customer sentiment during the marriage season. Dispatches of motorcycles fell by 55.7% to 295,297 units, while for scooters it dropped by 83.6% to 50,394 units.

Demand for two-wheelers, especially in the entry-level segment, has been softening in the past few months because of an increase in prices of vehicles and resumption of public transport.

Siam did not share wholesale data for the month for commercial vehicles.

The vehicle wholesale data for May is in line with the retail data released by the Federation of Automobile Dealers Associations on Thursday. Showroom sales of passenger vehicles decreased by 59% to 85,733 units and for motorcycles and scooters it dropped by 52.5% to 410,757.

“We witnessed a steep and unexpected surge in covid cases in the country from March end. This intensified in April and further in May, because of which there were restrictions and lockdowns in various parts of the country. This impacted auto sales and production in May, as overall sentiments turned negative. Commercial vehicles and passenger vehicles were more hurt in this month than tractors and two-wheelers. The fear factor was very strong in the month, prompting customers to stay at home, thus impacting retail sales," said analysts of LKP Securities.

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