Tata Motors Ltd (TML) domestic vehicle sales crashed 82% year-on-year at 23,845 units for the June quarter due to the disruptions caused by the pandemic. TML’s domestic sales in Q1FY20 were 131,879 units.
The company switched to reporting quarterly sales since April earlier this fiscal.
The fall in domestic dispatches is the result of sharp decline in the production of commercial as well as passenger vehicles owing to the lockdown and subdued market demand.
In the commercial vehicle or CV business, which forms the backbone of TML, it saw sales fall 90% YoY to 10,476 units on the back of economic activities coming to a halt as the result of the pandemic-induced economic crisis and muted demand for new trucks and buses.
Girish Wagh, president, commercial vehicles business unit at Tata Motors said, “Retail sales were 67% behind wholesales due to negligible opening inventory at the dealers and muted demand. As the country moved to the unlock phase, all plants started operations from the end of May and ramped up production gradually as parts availability improved."
Wagh said there are early recovery signs in a few sectors as the company hopes for a gradual pickup in demand on the back of overall economic recovery.
Meanwhile, TML’s passenger vehicle or PV business unit has posted a decline of 61% in its June quarter volumes at 14,571 units. The company had sold 36,945 units during the year-ago period.
“The COVID-19 lockdown deeply impacted PV industry sales in Q1FY21. After partial sales recovery in May’20, pent up demand supported a steeper recovery of retail in June’20," Shailesh Chandra, president, passenger vehicles business unit, Tata Motors said.
He added that retail offtake for cars was stronger than the wholesale volumes by 27% as the company focused on retail initiatives and ensured optimum inventory levels across its dealers channels to keep costs low.
Chandra also added that while Altroz hatchback continues to draw strong enquiry levels, the company has sold 328 electric vehicles during the June quarter.
In order to steer through the pandemic led crisis, the company is trimming down costs across Jaguar Land Rover (JLR) as well as its domestic operations including cutting down its capex plans. It aims to save up to GBP 5 billion at JLR and ₹6,000 crore in its domestic operations by March 2021.
As the company continues to implement it’s deleverage plans, it said that it has cash and cash equivalents of more than ₹5,000 crore and undrawn committed facilities of ₹1,500 crores as of 30 June 2020.