1 min read.Updated: 02 Jul 2020, 05:45 AM ISTAmit Panday
Major automakers reported a near 50% year-on-year decline in wholesale volumes for June
Tractor and two-wheelers, on the other hand, have seen a sharp recovery in the month on the back of rural demand.
India’s top automakers posted sharply higher sequential increases in wholesales, or factory dispatches, in June as they ramped up production though it remained a far cry from the pre-covid-19 levels.
Sales at Maruti Suzuki India Ltd and Hyundai Motor India Ltd, the country’s top two carmakers, were nearly half of their year-ago volumes. Tractor and two-wheelers, however, saw a sharp recovery because of rural demand.
Maruti Suzuki reported a 53.8% decline in local passenger vehicle sales to 51,274 units from a year ago. June sales were a sharp improvement from May when it sold 13,865 vehicles. Maruti reopened its plants in a staggered manner in May and gradually ramped up production.
Sales of hatchbacks, which make up bulk of Maruti’s sales, fell 55% to 37,154 units from a year ago.
The automaker anticipates demand to return for its entry-level small cars.
Puneet Gupta, associate director at IHS Markit, said demand recovery has been poor relative to other markets due to the strict lockdown.
“However, demand has outstripped production in June. While safety norms in factories continue to be stringent, fear among contractual workers remains high," he said, adding contract workers would be needed for 80% capacity utilization.
Hyundai reported a 49% drop in domestic sales in June at 21,320 units. The company sold 6,883 vehicles in May.
Mahindra & Mahindra Ltd posted a 53% decline in sales at 18,505 units though it doubled from May’s 9,076 units.
“The industry has started to see recovery both in the passenger and small commercial vehicle segments, led primarily by rising rural demand and movement of essential goods across the country," said Veejay Nakra, chief executive officer, automotive division, M&M.
Toyota Kirloskar Motor Pvt. Ltd reported a 64% decline in June sales at 3,866 vehicles.
“Our retails is nearly double of wholesales, second month in a row, thereby bringing down our dealers inventory carrying cost by more than 50% over the past two months.," Naveen Soni, senior vice-president, sales and service, said.