July sales hint at auto sector revival

July sales hint at auto sector revival

Signalling a possible recovery from the COVID-19 induced shock for the automobile sector, the country’s largest car maker Maruti Suzuki posted a year-on-year growth of 1% in domestic wholesale sales in July, while Hero MotoCorp, the two wheeler market leader, inched closer to the dispatch numbers of July 2019.

However, other manufacturers such as Mahindra and Mahindra, Honda Cars and Toyota Kirloskar Motor (TKM) continued to post a double digit decline in domestic wholesale.

July sales hint at auto sector revival

Maruti Suzuki on Saturday said it had dispatched over one lakh units in the domestic market, with sales of mini segment cars (Alto and S-Presso) and utility vehicles (Gypsy, Ertiga, S-Cross, Vitara Brezza and XL6) rebounding by 49% to 17,258 units and 26% to 19,177 units respectively.

Compact segment car sales, which includes WagonR, Swift, Celerio, and Dzire, however, fell 10% to 51,529 units.

Hyundai Motor India sold 38,200 units in the domestic market last month as against 39,010 units in July 2019, down 2%.

Honda Cars India said it sold 5,383 units in the domestic market in July 2020 as against 10,250 units in July 2019.

Also read | Maruti posts first loss since 2003 as lockdown hits output

Rajesh Goel, senior vice-president and director, Marketing & Sales, Honda Cars India Ltd, said, “July was action packed for us as we launched 3 models — New WR-V, Civic BS-6 Diesel and All-New 5th Generation Honda City, which have helped us create excitement in the market and improve buying sentiment… We gradually ramped up our production to 60% of the pre-COVID level in July and despatched the entire available factory stock, registering a sequential growth of 285% over June 2020.”

Mr Goel added that with the festive season coming up, the company is quite positive about the industry getting back on track gradually.

Homegrown Mahindra and Mahindra posted a decline of 35% in total domestic sales at 24,211 units. While sales of passenger vehicles was down 34% to 11,025 units, that of commercial vehicles fell 18% to 13,103 units.

Also read | Automobile majors resume partial operations

“At Mahindra, we are happy to see a growing trend in our overall vehicle sales, buoyed by the continuing revival in demand, primarily in rural and semi-urban India. It is encouraging to see that the enquiry and booking levels in July are significantly higher compared to June, both for Utility Vehicles and Small Commercial Vehicles,” Veejay Nakra, Chief Executive Officer, Automotive Division, M&M Ltd. said. The company had sold 8,075 passenger vehicles and 10,417 commercial vehicles in June.

Likewise, TKM posted a 48% decline in domestic vehicle sales to 5,386 units in July as against 10,423 units in the same month last year. However, compared to June 2020, the sales were up 40% from 3866 units.

Naveen Soni, Sr. 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. The first month post unlock (June) witnessed demand rekindling and retails being very good due to several factors including pending customer orders as well as pent up demand accumulated as a result of the extended lockdown.”

However, he added that in July, as a result of sporadic lockdowns and extensions being imposed in several parts of the country, led to a situation wherein business was closed in upto 20% of the market, in and around mid-July.

Also read | Coronavirus spread to impact India’s auto component industry, says body

MG Motor India posted a 40% increase in retail sales at 2,105 units, up from 1,508 units in July 2019. Rakesh Sidana, Director- Sales, MG Motor India, said, “The overall market environment continues to be challenging with uncertainties due to variable lockdowns in various phases. The component supplies continue to remain impacted especially from the Chennai region. However, despite these challenges, our production has remained at similar levels in July as compared to June 2020 and we expect the situation to improve during the festival season.”

In the two-wheeler segment, Hero MotoCorp sold over 5.14 lakh units of motorcycles and scooters in July 2020. “Despite the prevailing economic slowdown on account of the Covid-19 pandemic, the Company registered a sequential growth of 14% over the previous month (June 2020) and reached more than 95% of wholesale dispatch numbers of the corresponding month in the previous year (July 2019),” it said.

Rival Honda Motorcycle & Scooter India said in its total dispatches in July 2020 stood at over 3.21 lakh units on back of increasing demand for personal mobility in the COVID-19 era. In July 2019, however, the company had sold over 4.89 lakh units.

Suzuki Motorcycle India Pvt Ltd said its domestic sales stood at 31,421 units last month, as against 62,366 units in July 2019, down 50%. However, the sales were up 37% from June 2020. Koichiro Hirao, Managing Director, Suzuki Motorcycle India Pvt Ltd. said, “With the unlock phase, the automobile industry is now marching towards normalcy in terms of production, distribution and sales while continuing to adhere to all the precautionary measures. From August 2020, we will try our best to achieve Pre-Covid-19 production and sales volume.”

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