The Society of Indian Automotive Manufacturers in India has announced that in March 2020, new car sales were halved as domestic sales for passenger vehicles stood at -51%. SIAM claims that March 2020 was the most challenging period for the automotive industry as the nationwide COVID-19 lockdown forced not only sales to stop, but also halt production entirely.
Rajesh Menon, Director General, SIAM stated: “Automobile industry witnessed one of its sharpest decline 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.”
Indian Car Sales March 2020
In March 2020, the Passenger Vehicles segment in the domestic market, declined by 51%, as it sold 143,014 units against 291,861 units in March 2019. A closer look shows that passenger car sales declined by 52%, utility vehicles dropped by 44.6% and the demand for Vans declined by around 70% in March 2020.
The Medium and Heavy Commercial Vehicles sector fared the worst as the segment’s demand dropped by 87%. The two-wheeler industry did not fare as bad as the others, but it also took a massive hit. Domestic two-wheeler sales in March 2020 stood at 866,849 units, registering a decline of around 40% against 1,440,593 units in March 2019.
Overall production for March 2020 dropped to 1,447,345 units resulting in a drop of 33.6%. This has mostly been contributed to the 21-day lockdown imposed nationwide around the final week of the month. As production was impacted, exports also suffered. The Indian auto industry’s exports declined by 24.5%.
In March 2020, many automakers had announced their sales numbers and all of them recorded in red. Sales for market leader Maruti Suzuki say a drop of 47%, while their closest competitors, Hyundai India also reported a similar drop in demand. Demand for Honda cars plummeted by 78% while Mahindra & Mahindra sales declined by 87%.
Rajan Wadhera, President, SIAM, said “The industry was already reeling under severe degrowth 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 our estimates at SIAM, Auto industry is losing Rs 2,300 crore in production turnover for every day of closure.”
He added, “The Auto Industry is engaged in a dialogue with the Government of India on policy measures which could minimise the impact of COVID on the Indian Economy and especially the Indian Automobile Industry.”
Indian Car Sales Financial Year 2019-2020
The last 15 months are not something the Indian automotive industry would like to remember. SIAM’s fiscal numbers show that between April 2019 and March 2020, the Indian domestic market saw a decline of 18%. The demand for Passenger Vehicles was also on the downward trend registering degrowth of 17.8%. The Medium & Heavy commercial vehicle segment too dropped by 42%. The Two-Wheeler industry declined by 17.76%. Domestic sales in FY2019-20 stood at 21,548,494 units against 26,266,179 units from the previous fiscal.
Export numbers,, on the other hand, provided marginal relief as the export market grew by a mere 2.9%. Overall exports in the fiscal stood at 4,765,754 units against 4,629,049 units from FY19-20. Passenger Vehicle exports held on with negligible 0.17% growth while two-wheeler exports are by 7.3%. However, M&HCV sector exports were halved in the fiscal.
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