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Falling sales graph may be a major source of concern for automakers, but April could see the line of the graph at the bottom in a flat, lifeless depiction of how hard Covid-19 has affected the industry. Indian automotive. With the national shutdown in effect since March 24 and currently slated to remain in effect until May 3, both manufacturing and demand have almost completely stopped. Silent factories, closed dealerships, and people restricted to their homes have meant that there is a very real chance that manufacturers will report absolutely insignificant sales numbers for the month of April, if they report anything.
Zac Hollis, for example, recently visited Twitter to highlight how the current situation is not at all like what the Director of Skoda Auto India has witnessed. “Well, after 30 years in the motor industry, this will be the first time in my career that I will officially sell zero cars in a month. I know the business will be back soon, in the meantime stay safe and follow government guidelines wherever you are, “he wrote in his official Twitter identifier.
R C Bhargava, president of Maruti Suzuki, also noted that sales figures would not be able to open an account in April. “It hasn’t happened every time there is no sale (but) April is going to be one of those months. The auto industry contributes 50% of all manufacturing in the country. Thousands of companies depend on automakers: glass, rubber. These are unprecedented times, “he told HT Auto on Saturday.
The ominous signs were very clear from March itself when the sales figure for the month showed a dramatic drop. Maruti Suzuki reduced production by 32% and its domestic wholesale sales fell 46.4% to 79,080 units compared to March 2019. Hyundai reported a 40.69% decrease in domestic sales last month to 26,300 units. It was almost a butcher shop for Mahindra and Mahindra, and Tata Motors, which saw spiraling personal vehicle sales 90% and 84%, respectively. (Read the full report here)
These are gigantic and quite unprecedented numbers. And with all of April under a lockdown, all signs clearly point to zero or near-zero sales.
However, market analysts say the way forward for auto companies does not lie with the assessment of April sales because conditions were beyond their control. In fact, now it resides in getting out of here and paving the way since the blockade is lifted. Getting the factories back up and running will take effort. Previous plans could seriously rethink and audit firm KPMG in a report said new product launches could be shelved or delayed.
The current stalemate in the Indian auto sector is not just here, but a crisis for companies around the world. It has led many to reevaluate investments in newer technology, R&D, facelifts, and new models. Auto component manufacturers are also facing problems around the world and it could be an extremely challenging 2020 before things improve in 2021.
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