Auto sales see sharp jump in June

Sharp jump as plant, dealers reopen; retail sales still in slow lane

By:July 2, 2021 1:03 AM
Wholesale dispatches of passenger vehicles down due to Covid-19Image used for representation

Wholesale auto despatches saw a sharp jump across segments in June compared to the same month last year as well as the preceding months. However, barring Maruti Suzuki – in June 2019, Maruti had observed a week-long annual maintenance shutdown – the despatches are still lower than what it was in June, 2019 for all other manufacturers. Though 2019 was also a subdued year in terms of wholesales, it has become the benchmark being the year before the pandemic struck bringing sales to new lows.

The reason for the sharp turnaround in June this year is because dealerships resumed stocking after lockdowns, which started April onwards. Plants also resumed normal production after being closed for up to a fortnight in May. In May, around 80% of Maruti’s showrooms across the country were closed because of local lockdowns. Similarly, Hyundai’s showrooms were open only in some 4-5 cities.

However, since the opening up of dealerships began only after the first fortnight of June, retail sales have been slow compared to wholesales during the month, company executives said. Data for retails sales are expected next week.

Still, auto executives are optimistic that if the pandemic remains under control and there is no third wave, the numbers will go up here onwards.

Maruti Suzuki, which reported sales of 1.26 lakh units in the domestic market, inched closer to its despatches of 1.3-1.5 lakh units during normal times. The company said sales in the first quarter of both FY20-21 and FY21-22 have been far from normal owing to Covid-19-related lockdowns and disruptions and hence, any comparison would not be meaningful.

Hyundai Motor India sold 40,496 units in the domestic market during June, a 90% gain over June of last year, but 4% fall from 2019 levels. Tarun Garg, director (sales, marketing & service), Hyundai Motor India, said, “With markets opening up and improvement in customer sentiments, Hyundai is committed to deliver innovative and world class quality products and services meeting and exceeding customers aspirations.”

Tata Motors also witnessed a year-on-year increase of 125% in June sales volumes to 43,704 units on the back of good sales in both passenger and commercial vehicles, but the wholesale despatches declined nearly 11% compared to June 2019. Commercial vehicle sales improved 150% y-o-y to 22,100 units, while passenger vehicle sales recorded a 111% y-o-y increase to 24,110 units.

Ashok Leyland registered a 174% y-o-y increase in sales of commercial vehicles in June to 5,851 units, but a sharp 51% decline compared to 2019 levels, highlighting that the weakness in sales persists.

Improvement in both passenger and commercial vehicle sales led Mahindra and Mahindra (M&M) also to sell 30,357 units in June, which was a 64% jump y-o-y, but 23% decline compared to June 2019. The passenger vehicle segment sold 16,913 units, which was more than double the sales made in June 2020, commercial vehicle sales also surged 28% y-o-y to 13,444 units.

Veejay Nakra, chief executive officer (automotive division), M&M, highlighted that the demand is picking up and supply chain has stabilised, while the global semiconductor issue continues to be a challenge. “With the opening up of the market in a phased manner, we are seeing a boost in demand, both urban and rural, and we expect the upward trend in demand to continue across all segments and markets,” he said.

Naveen Soni, senior vice president, (sales & services), Toyota Kirloskar Motor, said, “We are witnessing good traction in the market arising out of ‘pent up demand’ and thereby leading to good levels of enquiries and new customer orders. We also anticipate retail sales to be better in the coming months, provided that the pandemic doesn’t pose newer challenges at us.”

However, the impact of second wave of the pandemic is felt more acutely by the two-wheeler manufacturers as customer sentiment has been impacted severely in the case of business community and low-income categories. While Hero MotoCorp saw a mere 2% y-o-y increase in sales at 4.38 lakh units, Bajaj Auto sold 1.62 lakh units in June, higher by 7% y-o-y. However, compared with 2019, there is a sharp decline of 33% and 29% witnessed by Hero and Bajaj, respectively.

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