Covid-19 lockdown: Vehicle sales picked up in May as production, dealerships restart

India's ace passenger vehicle maker, Maruti Suzuki registered sales of 13,865 units in the domestic market, almost 89% lower than the same month last year. During normal times, Maruti Suzuki despatches close to 1.3-1.5 lakh units a month. The brand resumed its manufacturing operations post-lockdown in a staggered manner in May.

By:Published: June 2, 2020 10:47 AM

After a total washout in April due to the lockdown, auto sales picked up a bit in May as companies were allowed to resume production as well as open their retail showrooms. Though all the companies which reported their despatches (from factory to dealers) on Monday registered a steep decline – over 80% – compared to the same month last year, such comparison does not make sense. The despatches reported by the companies in May are mostly from the stocks they had in their factories with very little being produced afresh after the reopening. Company executives said that June will be the real indicator of whether fresh demand, in terms of bookings are coming or not and that would fashion future sales trend. The country’s top passenger vehicle manufacturer, Maruti Suzuki reported sales of 13,865 units in the domestic market, which is almost 89% lower than the same month last year. During normal times, Maruti despatches around 1.3-1.5 lakh units in a month. The company resumed all its manufacturing operations post-lockdown in a staggered manner in May. Over 2,000 of its nearly 3,000 showrooms are now open.

The second largest passenger vehicle manufacturer, Hyundai Motor India sold 6,883 units in the domestic market during May, which it said was on the back of strong customer interest in the new Creta, new Verna, Venue, Elite i20 and Grand i10 NIOS. Tarun Garg, director (sales, marketing & service), Hyundai Motor India, said, “In an extremely challenging market environment, HMIL made a humble beginning.”

Mahindra and Mahindra (M&M) sold 3,867 units in the passenger vehicles segment, which was a decline of 81% compared to May 2019. In the commercial vehicles segment, the company suffered a fall of 71% year-on-year and sold 5,170 vehicles in May 2020. Auto industry executives are hoping that as the unlocking begins demand will gain traction in the coming months. Veejay Nakra, CEO (automotive division), M&M said, “Our performance during May has been muted, due to the challenges the industry is facing. We have opened 70% of our dealerships and retail sales have begun.” The company is seeing initial traction for its small commercial vehicles and SUV brands such as the Bolero and Scorpio.

However, with agriculture and allied industries getting covered under essential services, tractor sales have gained some traction. M&M sold 24,017 units in the domestic market in May, an increase of 2% year-on-year. Total tractor sales including exports were at 24,341 units, a decline of 1% y-o-y, as the company’s exports declined 72% y-o-y in the month of May. The company recorded exports of 324 tractors. Hemant Sikka, president (farm equipment sector), M&M, said, “In the near term, farmer sentiment is likely to remain positive due to several developments including robust rabi crop production, higher procurement, good price realisations and the forecast of a normal monsoon that bodes well for a good kharif crop. All these augur well for tractor demand going forward.”

Toyota Kirloskar sold 1,639 units in the month of May, which was a decline of 86% on a y-o-y basis. Naveen Soni, senior vice president, (sales & services), Toyota Kirloskar Motor, said, “The market has been slow and with demand being less, we have been able to wholesale only 20% of what we would have clocked under a normal situation. However, retail sales have been much higher when compared to wholesales, thereby helping us reduce the month closing inventory levels at dealerships. We have also seen a significant surge in customer orders and enquiries online, through digital platforms.”

Two-wheeler manufacturer Hero MotoCorp sold 1,08,848 motorcycles and scooters in the domestic market, which was a decline of 83% y-o-y. All six manufacturing facilities of the company in India have now resumed operations with limited production. Nearly 5,000 outlets of Hero MotoCorp have also re-opened. These outlets, which contribute 85% of the company’s domestic sales, retailed more than 1,60,000 units of motorcycles and scooters during the month of May, which the company said was driven by demand in the semi-urban and rural markets, with BS-VI vehicles witnessing positive customer response.

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