India: Lockdowns pull the brake on auto sales in May '21

Major automobile manufacturers like Maruti Suzuki, Hyundai, Mahindra & Mahindra, Tata Motors and,Hero MotoCorp, amongst others reported a double-digit decline in auto sales in May '21 compared to the previous month as a spike in Covid-19 cases and lockdowns across states hit production and dispatches.

Maruti Suzuki India Limited:The country's largest carmaker, Maruti Suzuki India(MSIL), which shut production from 1-16 May '21 to divert oxygen for industrial use towards for medical purposes, reported a 75% drop in domestic dispatches to dealers at 32,903 units in May '21, against 1,35,879 units in Apr '21.

Hyundai Motor Co:This Korean auto major’s plant was also closed in May '21, for around 5-10 days for the annual maintenance shutdown and another five due to workers' agitation for closure because of rising cases of Covid in Tamil Nadu. The company posted domestic sales of 25,001 units last month as against 49,002 units in April, a drop of 49% m-o-m.

Tata Motors:The company said its passenger vehicles sales in the domestic market stood at 15,181 units in May '21, down 40% from 25,095 units in Apr '21.

Honda Cars India Limited:HCIL despatched 2,032 units in the domestic market in May '21 amid the prevailing second wave of Covid-19 and state-wide lockdowns. Multiple state-wide lockdowns throughout the country to control the spike in Covid-19 infections in May 2021 impacted retail business. "During last month, we also undertook extended maintenance related shutdown of our factory, leading to limited production but effectively breaking the chain amidst the high number of cases in north India," Rajesh Goel, Senior Vice-President and Director, Marketing & Sales, HCIL, said.

Mahindra and Mahindra Limited:For Mahindra and Mahindra(M&M), domestic passenger vehicle(PV) sales were at 8,004 units in May '21 against. It had sold 18,285 units in April this year and 3,867 units in May '20. Its domestic commercial vehicle(CV) sales stood at 7,508 units, as against 16,147 units in April this year and 5,209 units in May '20. "With the cases coming down and gradual opening up of markets, we foresee a strong demand rebound. We are working closely with our supplier partners to manage supply chain issues and meet market demand," Veejay Nakra, CEO, Automotive Division, M&M Ltd., said.

Ashok Leyland:This auto major reported overall sales of 3,199 units in May '21, according to the company's exchange filings. The automaker's sales fell by 62% over the last month as demand took a hit amidst the second wave of the coronavirus.

Two-wheeler

In the two-wheelers segment, market leader Hero MotoCorp said it sold over 1.59 lakh units in the domestic market last month due to the adverse impact of the plant closure amid the second wave of the pandemic. Sales stood at over 3.42 lakh for Apr '21. "Hero MotoCorp proactively halted operations at all its manufacturing facilities across the country on April 22. Three of the plants located in Gurugram, Haridwar and Dharuhera resumed single-shift operations on May 17, followed by the other three located in Neemrana, Halol and Chittoor, on May 24," the company said.

Honda Motorcycles and Scooters India(HMSI) dispatched 38,763 units in May '21 against more than 2.4 lakh in Apr '21. Yadvinder Singh Guleria, director, Sales & Marketing, HMSI, said, "May 2021 witnessed further slowdown in the sales momentum with close to 80% of the network being non-operational due to local lockdowns."

TVS Motor Company's total two-wheeler sales stood at 154,416 units in May '21 as against 2,26,193 units in Apr '21.

Outlook

With the vaccination drive gaining pace and a sharp decline in the number of Covid-positive cases, markets across the country are expected to open up gradually. This may escalate the need for self-owned vehicles in the future.