Home >Companies >News >No end to worries for automakers as sales continue to fall in February

Mumbai: India’s top carmakers reported lower sales in February as they adjusted production to prepare for an impending shift to producing vehicles that can meet stringent emission norms even as they battle supply chain challenges due to the coronavirus epidemic.

Data released by Maruti Suzuki India Ltd, Hyundai Motor India Ltd, Mahindra and Mahindra Ltd (M&M) and Tata Motors Ltd showed total sales of 197,080 vehicles last month, a 12% drop from 224,241 units sold a year earlier.

Auto sales are measured as wholesales or factory dispatches to the dealerships.

Sales at Maruti Suzuki, the top carmaker, fell 2.3% year-on-year in February to 133,702 units. Second-ranked Hyundai posted a 7.2% drop to 40,010 vehicles. At Tata Motors, passenger vehicle sales fell 31% from a year earlier in February to 12,430 vehicles, while M&M saw a 58% drop to 10,938 units.

“The outbreak of Covid-19 in China and a recent fire incident at one of our strategic vendors affected the vehicle production and wholesale volume," said Mayank Pareek, president of passenger vehicles business unit at Tata Motors, referring to Varroc Lighting Systems Ltd’s plant in Hinjewadi, Pune, which was gutted on 18 February.

M&M has been struggling to arrange parts from China even as it works towards ramping up output of vehicles compliant with Bharat Stage-VI (BS-VI) emission norms, which will come into force from 1 April. The coronavirus outbreak has forced several plants in China’s Wuhan—the epicentre of the deadly virus and home to several automotive plants—to shut factories. Some are gradually reopening, though with sharply lower attendance.

Veejay Ram Nakra, chief of sales and marketing, automotive division at M&M, said: “The ramp-down of BS IV vehicle production has been in line with our plan for February. However, because of the unforeseeable challenges on the parts supply from China, our BS-VI ramp-up has been affected. This has resulted in a high degrowth in our billing volume for February and our dealer inventory is now under 10 days.

“Going into March, we anticipate the challenge on parts supply to continue for another few weeks, before we get back to normalcy."

Gaurav Vangaal, associate director, light vehicle production forecast, IHS Markit, said since this is the first time that carmakers have seen such a major jump in mandatory emission norms, they have been struggling with localization of critical parts in India to meet the stiff deadlines.

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