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Car sales register steep decline in May, tractors lead road to recovery

Auto industry is expected to bounce back as lockdown norms are eased and domestic consumption steadily recovers; green shoots are already visible as tractor sales remain untouched by the prevalent gloom of coronavirus

twitter-logoSumant Banerji | June 2, 2020 | Updated 00:48 IST
Car sales register steep decline in May, tractors lead road to recovery
The steep decline in passenger vehicle sales came on the back of zero sales in April due to coronavirus lockdown

Passenger vehicle sales in India saw a steep 84 per cent drop in sales in May over last year as staggered resumption of operations both at the factories and showrooms hampered business activity for all companies. It however came on the back of zero sales in April when the country was in a state of total lockdown.

Market leader Maruti Suzuki saw its domestic tally drop by nearly 89 per cent at 13,700 units, while arch rival Hyundai suffered a 84 per cent drop at 6,883 units.

ALSO READ: Coronavirus impact: Maruti registers 89% decline in sales in May 2020

Maruti resumed its manufacturing operations post lockdown from May 12 at its Manesar facility and from May 18 at its Gurugram facility. Production also resumed at Suzuki Motor Gujarat Pvt Limited (SMG) from May 25, 2020. SMG manufactures cars on a contract basis for Maruti Suzuki. Similarly, showrooms opened in accordance with Centre and state guidelines in a graded manner across different cities.

"In an extremely challenging market environment, Hyundai made a humble beginning towards normalcy by registering cumulative sales of 12,583 for the month of May 2020," said  Tarun Garg, Director (Sales, Marketing and Service), Hyundai Motor India Limited. "This performance was made possible on account of strong customer interest and demand pull generated by trendsetter brands like the All New Creta, Verna, Venue, i20 and Grand i10 Nios. We have prepared ourselves to welcome our customers back in this new normal while ensuring adherence to safety guidelines at our showrooms and workshops and expedite economic recovery."

ALSO READ: Coronavirus impact: M&M registers 79% decline in sales in May

Others fared no better. Mahindra and Toyota saw over 80 per cent decline while Tata Motors, Renault and Nissan registered over 70 per cent drop in sales. The worst affected were Honda, Nissan, Ford and Fiat with sales contracting by over 90 per cent.

"Our performance during May has been muted, due to the challenges the industry is facing. We have opened 70 per cent of our dealerships and retail sales have begun. We are seeing initial traction for our small commercial vehicles and SUV brands such as the Bolero and Scorpio," said Veejay Nakra, Chief Executive Officer, Automotive Division, Mahindra & Mahindra Ltd. "As new lockdown norms are being announced we are hopeful of demand gaining traction in the coming months."

The situation, however, is only likely to get better as lockdown norms are further eased and domestic consumption steadily recovers. Some green shoots are already visible. Sale of tractors, which were not impacted by the lockdown as they are allied activity with agriculture, saw nominal growth during the month on the back of good rabi crop. Tractors are a barometer of the mood in rural markets and an upturn there signifies a turning of the corner for the overall economy.

ALSO READ: Coronavirus fallout: MG Motor sells 710 units in India in May

India's largest tractor maker Mahindra and Mahindra sold 24,017 units in the domestic market, a 2 per cent growth over last year.

"The timely relaxation of the lockdown for the agricultural sector helped ensure the speedy recovery of tractor demand during May," said Hemant Sikka, President - Farm Equipment Sector, Mahindra & Mahindra Ltd. "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."

The Indian Meteorological Department (IMD) on Monday confirmed the Southwest monsoon that brings bulk of the rainfall in India has set in on time in Kerala. It has also predicted a normal monsoon for this year.

The end of a long and dark tunnel may finally be visible.

ALSO READ: Hyundai Motor India exports over 5,000 units in May

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