July 2020 car, bike, scooter sales: Indian auto industry shows strong signs of recovery

While the vehicle sales on a sequential basis have recovered strongly, registering high double-digit growth as factories resumed production and most dealerships having opened, year-on-year sales, though still not fully strong, have certainly recovered a lot of lost ground.

By:Updated: Aug 02, 2020 11:07 AM

Auto sales (factory despatches to dealers) bounced back smartly for the month of July on a sequential as well as yearly basis. While sales on a sequential basis recovered strongly, registering high double-digit growth as factories resumed production and most dealerships having opened, year-on-year sales, though still not fully strong, have certainly recovered a lot of lost ground. For instance, Maruti Suzuki India touched the sale figure of one lakh in the domestic market during the month. This was after a gap of four months — the company had last despatched more than a lakh vehicles in February. In normal times, Maruti on an average despatches 1.20 lakh units in a month. Another noteworthy feature was that volumes for entry-level cars like Alto, S-Presso saw a 49% growth on a yearly basis.

Similarly, Hyundai Motor India (HMIL), the second-largest passenger vehicle manufacturer, touched around 98% of pre-Covid levels. Its domestic sales in July stood at 38,200 units compared to 39,010 units in July last year. The company had seen a near 50% decline in its June 2020 numbers on a y-o-y basis. With the impact of Covid-19, pandemic experts have been suggesting that personal mobility will gain momentum among customers, propelling higher vehicle purchases. With June and July showing signs of better performance despite Covid-19 yet to wane, it appears that people are indeed making purchase decisions. Meanwhile, growth led by rural demand continues, even as supply chain constraints persist.

Tarun Garg, director (sales, marketing & service), Hyundai Motor India, said, “With the changing trend of preference for personal mobility, our consistent efforts are towards fulfilling the customer needs and meeting the market demand.” He said the performance was driven by good customer demand for the company’s brands like the new Creta, Venue, Verna, Elite i20 and Nios. Mahindra and Mahindra (M&M) clocked total domestic sales of 24,211 units, which was an improvement of 31% m-o-m, while the sales on a y-o-y basis remained sluggish and declined 35%. This, too, was better compared to June y-o-y fall of 53%. Veejay Nakra, chief executive officer (automotive division), M&M, said the overall vehicle sales were buoyed by the continuing revival in demand, primarily in rural and semi urban India. “The enquiry and booking levels in July are significantly higher compared to June, both for utility vehicles and small commercial vehicles. As we ramp up production, the biggest challenge is on the supply side and working around these challenges is our top priority.”

Tractor sales at M&M continued to grow by 28% on a y-o-y basis with 24,463 tractors sold in the domestic market in July. Hemant Sikka, president (farm equipment sector), M&M said, “These are our highest ever July sales. The strong demand momentum continued, aided by positive sentiments due to good cash flows to farmers, higher Kharif sowing, a timely and normal monsoon cumulatively across June & July and continued higher rural spending by the government.”

Toyota Kirloskar Motors (TKM) recorded an increase of 39% on a m-o-m basis to 5,386 units, while a decline of 48% on a y-o-y basis. The company had registered a decline of over 63% in y-o-y sales in June 2020. Naveen Soni, senior vice-president (sales & service) TKM, said, “Despite various challenges, the month of July witnessed better sales in terms of both retail and wholesales when compared to June. We intend to catch up on both retails and wholesales beginning the festive month of August.” Suggesting that supply chain challenges still continue Soni said timely and clear instructions will help industrial units, better plan their production cycles and logistics including workforce and raw material movement.

Two-wheeler manufacturer Hero MotoCorp sold 5,06,946 motorcycles and scooters in the domestic market, which was an increase of 12.5% m-o-m, the wholesale despatches remained flat on a y-o-y basis versus a 31% decline seen in June. “The robust volumes have been driven by strong retail sales due to the positive market demand. While there is cautious optimism on the demand trajectory going forward, sales continue to be impacted by the micro-lockdowns in several parts of the country,” the company said in a statement.

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