Zero Auto Sales in April 2020 Due To Lockdown: What’s Next?
Carmakers say the impact of the lockdown will have a huge ripple effect on their production and sales cycles.
For the first time in India's recent automotive history, not a single passenger vehicle has been sold in the domestic market because of the nationwide lockdown to fight coronavirus. There were a small number of vehicles exported though because some resumption of activity at seaports was allowed in the last week of April.
The country's top automakers all put out releases stating they had sold zero vehicles in the month of April.
“April 2020, will be a month which the entire automobile industry would like to forget and implore that such a time never comes again in future. The entire country is under lockdown, the complete automobile ecosystem has been affected, right from the dealer to manufacturer to component manufacturer everyone. This is the first time ever in the automobile history that there has been no sales/zero sales, it is a difficult moment for all of us in the automobile community.”Ashish Harsharaj Kale, President, Federation of Automobile Dealer Associations (FADA)
Not selling a single unit in the domestic market has a multiplier effect. Automobile sales contribute to 8 percent of the GDP and have links to different sectors of the economy from banking, insurance, oil, paints, plastics, rubber industry and more. A sudden halt will have a ripple effect that will take months to restart. The sector claims to be losing Rs 2,300 crore per day.
Take a look at the impact comparing the number of vehicles sold in April 2019 to April 2020. Just with passenger cars alone, there were 2.39 lakh vehicles sold in April 2019. And none in 2020.
Maruti Suzuki sold 1.34 lakh vehicles in April 2019, but none in April 2020. The company did export 632 cars as port operations resumed partially. Hyundai, India's second-largest carmaker which sold over 40,000 cars domestically in April 2019, couldn't sell any in 2020. It did export 1,341 units.
Similar is the case at Mahindra, Toyota and Tata as well as all the other carmakers. However, the plants have not been lying idle completely. Most of the carmakers have been dedicating some space to making face shields, ventilators, ambu bags and other healthcare equipment to help fight COVID-19, besides donating to the cause.
There is hope.
Hyundai has received over 20,000 bookings for the new Hyundai Creta. Skoda has opened bookings for the new Skoda Karoq premium compact SUV. Triumph motorcycles has a new bike, the new Street Triple RS, waiting to hit showrooms. Datsun is ready with an update to the Redigo.
Mahindra has its new line up of the Scorpio and XUV500 that now meets BS-VI regulations as well as the upcoming Thar waiting. MG Motor is lining up the Gloster, while Kia is getting ready with the Sonet.
“As with many other sectors, with the closure of dealerships and manufacturing the operation of the automotive value chain has come to a grinding halt. Restart of the entire value chain cycle and its restoration will be gradual as the industry is faced with the challenges of low consumer sentiments, rebuilding of disrupted supply chains that need factors of productions to be restored that including return of workforce etc.”Naveen Soni, Senior Vice President, Sales & Service, Toyota Kirloskar
However, it may be a few months before consumer sentiment stabilises and car and bike sales pick up. The brighter side: There is only one way sales can go from here – up.
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