Covid-19 Recovery: Car, bike, scooter sales see pick-up in August 2020

While Maruti clocked an increase of 15.3% over July, Hyundai’s increase was nearly 20%. To be sure, the numbers come off a lower base; in August last year, manufacturers were busy clearing old stocks ahead of the BS-VI regime and had moderated production. 

By:September 2, 2020 10:26 AM

Wholesale auto despatches have seen a smart rebound in August with companies reporting big increases over July, and in many instances, even over August last year. Market leader Maruti Suzuki posted a chunky 21.7% year-on-year (y-o-y) rise in volumes as demand for compact and small cars perked up. Rival Hyundai Motor (India) wasn’t far behind with an increase of nearly 20% y-o-y. While Maruti clocked an increase of 15.3% over July, Hyundai’s increase was nearly 20%. To be sure, the numbers come off a lower base; in August last year, manufacturers were busy clearing old stocks ahead of the BS-VI regime and had moderated production. Two-wheeler makers haven’t done too badly either. Hero MotoCorp’s domestic despatches were up 8.5% y-o-y and 12.2% m-o-m.

The management anticipates sales would continue their upward trajectory, given the upcoming festive season, increasing consumer confidence and continued government policy support. Despatches at TVS Motors, however, fell 1% y-o-y. A cautious Tarun Garg, director (sales, marketing & service), Hyundai Motor, attributed the strong comeback to a good response to a clutch of new models and variants across the portfolio. Mahindra and Mahindra (M&M) did not quite see sales pick up as the growth in SUVs has been in the slow lane. M&M clocked total domestic sales that were up nearly 21% m-o-m; sales on a y-o-y basis declined 13%, better than July’s y-o-y fall of 35%. Veejay Nakra, CEO (automotive division), M&M, said the recovery has been good both for SUVs and pick-ups in the small commercial vehicles segment, adding that the uptick in demand had been met by managing the supply chain challenges.

With the country locked down due to the Covid-19 pandemic, auto sales were a washout in April and had plunged sharply in May before making a good recovery in June and July. Experts have been suggesting the demand for personal mobility would increase and the higher demand for smaller cars bears this out. However, given cars are now more expensive, incomes are not rising too fast and many more are working from home, some analysts are unsure whether volumes in FY21 will surpass those in FY20.

Tractor sales at M&M registered a sharp 69% increase on a y-o-y basis in the domestic market. Hemant Sikka, president (farm equipment sector), M&M, attributed the strong growth to an increase in kharif sowing area that had boosted sentiment since it indicated a bumper harvest. Sikka pointed out cash flows in rural India were good. He expects the rural sentiment to remain positive and translate into robust tractor demand moving into the festive period.

Toyota Kirloskar Motors (TKM) didn’t have a very good August, recording an increase in despatches of just 3.13% m-o-m and a sharp decline of 48% y-o-y. The company had registered a similar decline in y-o-y sales in July 2020. Naveen Soni, senior vice-president (sales & service), TKM said, the rise in positive Covid cases in Karnataka as also other parts of the country impacted demand and supply. Supplying vehicles to dealers, he said, had been challenging, given the spurt in infections in Bengaluru and surrounding areas where most the workforce resides. “This even led us to ramp down production to a single shift,” Soni said.

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