Lockdown Brings April Auto Industry Sales to Zero

NEW DELHI: It was a painful first month of the 2020-21 fiscal year for the car that posted zero sales in April amid the blockade and retail and mobility restrictions in place across the country due to the pandemic. The companies say there has been a loss of production and sales opportunity worth billions of rupees as the blockade remains in place, although some restrictions will be lifted from May 4.

Companies that make cars, SUVs, commercial vehicles and two-wheelers like Maruti Suzuki, Hyundai , Mahindra, Tata Motors, Ashok Leyland, Toyota, Hero and Honda reported zero deliveries, even when some managed to export a few hundred units after the port was allowed. A nervous group of companies say that going will be extremely difficult this year, as livelihood will take precedence over large ticket purchases and people will be wary of shopping malls, markets, and dealerships.

“Maruti had zero sales in the domestic market in April. This was because, in accordance with government orders, all production facilities were closed. Meanwhile, after the resumption of port operations, the first export shipment of 632 units was made from the port, ensuring that all security guidelines were followed, the company said. Toyota said the Covid crisis has only exacerbated already existing pressures in the auto industry, which has been battling the slowdown for the past few months.

“But the challenges this time are multidimensional. The blockade was absolutely necessary ... however, the inevitable side effect has been the serious adverse impact on economic activity, said Toyota's senior vice president (sales and services).

“We are concerned with how business will be conducted, even when we open. The outlook is bleak. We need massive support from the government and automakers, said a major retailer in Delhi, which has dealerships for various brands.

“A vehicle manufacturer cannot start operations if any of its suppliers cannot start production. Furthermore, production for a vehicle manufacturer would only amount to adding inventory and therefore blocking working capital in case dealers are unable to sell vehicles, a joint statement signed by three SIAM (manufacturers) industry associations, ACMA (parts manufacturers) and FADA (distributors) said.

comments