Passenger vehicle sale drops 50% in June Automobile Association reports

The automobile industry has taken a hit with sales falling by upto 50% of passenger vehicles. Demand for utility cars also fell by more than 58% in the previous month.

Passenger vehicle sale drops 50% in June Automobile Association reports. Passenger vehicle sale drops in India almost halved from the previous year in June. As the Coronavirus outbreak grappled the economy and caused disruptions to factory operations and supply chain management.

With the pandemic and borders sealed, companies are struggling to ramp up production after the lifting of the lockdown measures. The automobile industry was already facing a liquidity crunch and increased cost of production.

Domestic sales of passenger cars, utility vehicles, and vans fell 49.59% from a year earlier in June to 105,617 units, showed data released on Tuesday by the Society of Indian Automobile Manufacturers (Siam). Passenger car sales fell 59% during the month to 55,497 units, while utility vehicles recorded a 31% decline to 46,201 units. Van sales fell 62.06% to 3,919 units.

Sales Dropping

Sales at Maruti Suzuki India Ltd and Hyundai Motor India Ltd, the top-two carmakers, fell 54% and 49%, respectively, in June. Mahindra and Mahindra Ltd recorded a 57% decline. In the two-wheeler segment, scooter sales fell by 47% in June to 269,811 units while motorcycles dropped by 35% to 702,970 units. Overall, two-wheeler sales declined by 38.56% to 1.01 million units.

With retail sales picking up after the easing of the lockdown from May. Most automakers are trying to ramp up production as per demand. Rajan Wadhera, president, Siam, said the automobile industry. Will take as many as three to four years to reach the 2018 levels of vehicle sales. Also in the absence of any demand stimulus from the government.

Wadhera said profitability of most companies is under pressure as they made large investments to upgrade their engines to meet Bharat Stage-VI emission norms. India moved to BS-VI norms from 1 April.

“There are lots of issues in the supply chain network due to the continued restrictions in certain parts of the country. Also, there is a lack of manpower since people have moved back to villages. There is a huge challenge on the supply side, which is restricting wholesale now”. Wadhera said. “Demand now is just 40-50% of the corresponding quarter last year.”

The experts are of the view that with the unlock stage. But the urban demand in cities like Mumbai, Delhi will pick up with more people desiring personal means of transport.

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