Car And CV Sales Nosedive In March’20 Due To Covid Outbreak
The month of March witnessed a record drop in factory-gate shipments of passenger cars, two-wheeler and commercial vehicles, as buyers stayed away amid the nationwide lockdown. Hit by 21-day nationwide lockdown due to the coronavirus pandemic, passenger vehicle sales in India declined by 51 per cent in March.
The auto industry was already reeling under severe de-growth and the pressure of disrupted supply chain, which was followed by a majority of the auto companies announcing a shutdown of their manufacturing units in the last week of March 2020, due to concerns over ensuring workplace safety & health of their employees. As per the industry association’s estimates, the entire auto industry is losing Rs 2,300 crore in production turnover for every day of closure.
According to the data released by Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales, last month plunged to 1,43,014 units vis-à-vis 2,91,861 units in March 2019. Likewise, commercial vehicles sales saw a massive dip of 88.95 per cent last month at 13,027 units compared to 1,09,022 units in March 2019. Two-wheeler sales also went down by 39.83 per cent at 8,66,849 units in March as against 14,40,593 units in March 2019. Total sales across categories declined by 44.95 per cent last month to 1,050,367 units as against 19,08,097 units in March 2019.
Commenting on the sales figures, Rajesh Menon, Director General, SIAM noted, “Automobile industry witnessed one of its sharpest decline in domestic sales in March 2020 due to subdued demand and consumer sentiments which were further aggravated by the COVID-19 outbreak in the country,” adding, “The month of March 2020 was one of the most challenging months for the auto sector as the 21-day lockdown resulted in bringing the production and sales of vehicles to a standstill in the last week. As the revenues took a severe hit, the OEMs struggled on meeting fixed cost and working capital requirements."
SIAM maintained that the auto industry is engaged in a dialogue with the government of India on policy measures which could minimize the impact of COVID on the Indian economy and especially the domestic auto industry. As Menon claims, “There would be challenges on the supply side; demand-side and also on the issue of availability of finance which would all need to be addressed to bring back growth in the sector. We remain steadfast on “Building the nation responsibly.”
During FY 2019-20, the passenger vehicle sales witnessed a drop of 17.82 per cent to 27,75,679 units as against 33,77,389 units in the corresponding period a year ago. Similarly, commercial vehicles sales declined by 28.75 per cent to 7,17,688 units in April-March 2020 compared to 10,07,311 units in April-March 2019. Two-wheeler sales also declined by 17.76 per cent to 1,74,17,616 units in last fiscal as against 2,11,79,847 units in 2018-19 fiscal. Total sales across categories last fiscal declined by 17.96 per cent to 2,15,48,494 units as compared with 2,62,66,179 units in 2018-19 financial year.
