Home/ Companies / News/  Passenger vehicle sales almost halve in June

Passenger vehicle (PV) sales in India almost halved from a year earlier in June as the coronavirus outbreak caused widespread disruptions to factory operations and dented consumer demand.

With the pandemic unsettling supply chains, companies are struggling to ramp up production after the lifting of the lockdown measures. In some instances, coronavirus infections among factory workers are forcing companies to temporarily shut operations.

Domestic sales of passenger cars, utility vehicles, and vans fell 49.6% from a year earlier in June to 105,617 units, showed data released on Tuesday by the Society of Indian Automobile Manufacturers (Siam). June is the first month in this fiscal for which Siam has reported auto sales data. While factories were shut in April as part of the strict lockdown to contain the pandemic, some reopened in a staggered manner from mid-May.

Breakdown phase
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Breakdown phase

Passenger car sales fell 59% during the month to 55,497 units, while utility vehicles recorded a 31% decline to 46,201 units. Van sales fell 62.06% to 3,919 units.

Auto sales in India are counted as factory dispatches and not retail sales.

Sales at Maruti Suzuki India Ltd and Hyundai Motor India Ltd, the top-two carmakers, fell 54% and 49%, respectively, in June. Mahindra and Mahindra Ltd recorded a 57% decline.

With retail sales picking up after the easing of the lockdown from May, most automakers are trying to ramp up production as per demand. However, factors such as rising cases of covid-19 and lack of skilled manpower have limited their ability to increase production.

Rajan Wadhera, president, Siam, said the automobile industry will take as many as three to four years to reach the 2018 levels of vehicle sales in the absence of any demand stimulus from the government.

Wadhera said profitability of most companies is under pressure as they made large investments to upgrade their engines to meet Bharat Stage-VI emission norms. India moved to BS-VI norms from 1 April.

“There are lots of issues in the supply chain network due to the continued restrictions in certain parts of the country. Also, there is a lack of manpower since people have moved back to villages. There is a huge challenge on the supply side, which is restricting wholesale now," Wadhera said. “Demand now is just 40-50% of the corresponding quarter last year."

The covid-19 crisis has added to the woes of India’s auto sector, which has been battling headwinds like a liquidity squeeze and a decline in demand for more than a year in a slowing economy.

Siam has earlier forecast domestic sales of vehicles across categories to decline 26-45% this fiscal.

In the two-wheeler segment, scooter sales fell by 47% in June to 269,811 units while motorcycles dropped by 35% to 702,970 units. Overall, two-wheeler sales declined by 38.6% to 1.01 million units.

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Updated: 15 Jul 2020, 06:47 AM IST
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