New Delhi: Domestic passenger vehicle sales halved in March compared to the same period of last year due to the coronavirus crisis and the ensuing nationwide lockdown.
A total of 1,43,014 passenger vehicles were sold in March 2020 in India, 51 per cent lower than the 2,91,861 units sold in March 2019, according to data released by the Society of Indian Automobile Manufacturers (SIAM).
Commercial vehicle sales plunged 88 per cent to 13,027 units last month, compared to 1,09,022 units during the year ago period.
Three-wheeler sales stood at 27,608 units, 58.34 per cent lower on a year-on-year basis. Similarly, two-wheeler sales were recorded at 8,66,849 units in March 2020, compared to 1,440,593 units in March 2019, a decline of 39.83 per cent.
Commenting on the March data, SIAM Director General Rajesh Menon said: ” Automobile industry witnessed one of its sharpest declines in domestic sales in March 2020 due to subdued demand and consumer sentiments which was further aggravated by the Covid-19 outbreak in the country.”
SIAM President Rajan Wadhera said that March 2020 was one of the most challenging months for the auto sector as the 21-day lockdown resulted in bringing production and sales of vehicles to a standstill in the last week.
As the revenues took a severe hit, the original equipment manufacturers struggled to meet fixed cost and working capital requirements, he said.
“The industry was already reeling under severe degrowth and the pressure of disrupted supply chain, which were followed by a majority of the auto companies announcing a shutdown of their manufacturing units in the last week of March due to concerns over ensuring workplace safety and health of their employees,” Wadhera said.
He said that as per SIAM’s estimate, the Indian auto industry is losing Rs 2,300 crore in production turnover for every day of closure.
The auto industry is engaged in a dialogue with the government on policy measures which could minimise the impact of Covid-19 on the Indian economy, especially the automobile industry.
There would be challenges on the supply side and 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, Wadhera added.
Production of vehicles last month declined by 33.61 per cent to 1,447,345 units, including passenger vehicles, commercial vehicles, three-wheelers, two-wheelers and quadricycles, as against 2,180,203 units in March 2019, the data showed.
“Given extension of Covid-19 lockdown in several states like West Bengal, Maharashtra, Telangana and others; overall volume decline will be even sharper during Apr-2020,” said Ashish Modani, VP and Co-head corporate sector ratings, ICRA.
“ICRA expects wholesale volume to decline by 10-12 per cent in FY2021; though these estimates could be revised further once greater clarity emerges regarding the impact of pandemic on Indian economy.”
Sridhar V, Partner, Grant Thornton India LLP, said: “Historical slump in sales across different segments with commercial vehicles having the highest impact and whether it is exports or domestic sales, the story is the same.”
“Covid 19, lockdown, low sentiments has stunned the industry to no end and BS-VI has had a tumultuous start. OEMs have got a breather of 10 days from the Supreme Court for disposal of inventory post lifting of lockdown. They will have to workout clear modalities to surmount the challenge within the given time frame.”