The rising number of COVID-19 cases in India and a number of states responding to the pandemic with announcement of restricted lockdowns will hit businesses. R C Bhargava, Chairman, Maruti Suzuki India cautioned any prolonged shutdown will lead to demand going down. “Production cannot continue if sales stop. You can't run factories if dealerships are shut. It doesn't make sense."In an interview to Times of India, Bhargava said the country cannot afford shutdown anymore as it hit will hit the economy.
Earlier MSI Executive Director (Sales and Marketing) Shashank Srivastava told PTI: The Covid-19 situation deterioration is obviously a negative for customer sentiment and thus has a negative impact on sales," when asked about the impact of second wave of the the pandemic on the company's sales. Lockdowns make it physically not possible to deliver cars but even the deterioration in Covid-19 situation without lockdown also psychologically dents consumer propensity to buy, he noted.
Similarly, Toyota Kirloskar Motor (TKM) Senior Vice President Naveen Soni acknowledged that localised restrictions have impacted order flow and delivery schedules. We will be able access trends and define numbers only by the end of the month depending on the severity and extension of the restrictions. As of date, we have had a good number of pending orders that had to be carried forward from the month of February and nd March to April. Therefore, we are striving to meet the customer demand in spite of the local restrictions and lockdowns," he said.
On manufacturing operations, Soni said the company continues to cautiously proceed with vehicle production.
"Our immediate focus is to fasten and streamline the demand and supply processes with more accuracy and manage production, along with faster deliveries making it easier and convenient for customers by reducing the delivery time," he added.
Employees laid off
On Tuesday, newspaper reports said General Motors India has laid off 1,419 workmen at its Talegaon plant near Pune by invoking section 25 of the Industrial Dispute Act. Citing COVID, the Indian subsidiary of the US carmaker has terminated the services of all its workmen at its Talegaon plant, which is located on the outskirts of Pune. The carmaker has continued to pay its employees though it has not been manufacturing vehicles for the past four months, according to a report in ETAuto.
Passenger vehicles sales lowest in 6 years
The coronavirus pandemic has pushed India’s passenger vehicle sales to their lowest in six years, according to annual data from auto industry body Society of Indian Automobile Manufacturers ( SIAM), with the sector bracing for further fallout from a recent surge in cases.
The Indian auto sector was already facing a “deep structural slowdown” even before the pandemic and together this has pushed back sales by many years, Kenichi Ayukawa, president of the (SIAM), said to Reuters. “Recovery from here will require time and efforts, by all stakeholders,” said Ayukawa, who is also managing director of Maruti Suzuki, India’s biggest carmaker by sales.
Passenger vehicle sales fell 2.24 percent in the fiscal year ended March 31, 2021 to 2.71 million, with automakers such as Ford Motor and Volkswagen reporting falls of over 20 percent compared with an 8.5 percent drop for domestic rival Maruti, which sells one in every two cars in India, data from SIAM showed.
That was offset by higher sales from new entrants such as Kia Motors and SAIC Motor’s British brand MG Motors, as well as local rival Tata Motors.
Sales of trucks, a barometer of economic activity, tumbled 21 percent to an 11-year low, while motorcycle and scooter sales fell 13 percent to their lowest level in seven years, the data showed.
Before the second wave, the auto sector had been seeing a recovery in sales, despite challenges such as a shortage of semiconductors and higher raw material costs.
Domestic passenger vehicles sales in March crossed 290,000 compared with 281,000 in February and 276,000 in January, SIAM data showed.