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In a first, auto firms post nil sales in Apr SLIGHT RESPITE : Some of them managed to restart exports

May 02, 2020 05:40 AM

COURTESY HT MAY 2

In a first, auto firms post nil sales in Apr
SLIGHT RESPITE : Some of them managed to restart exports

Automobile manufacturers are likely to ramp up production up to 50% of their capacity in May and June, say experts. BLOOMBERG
Amit Panday

amit.p@livemint.com

mumbai : Indian automakers have for the first time reported zero local sales in April as factories and dealerships across the country remained shut to comply with a stringent lockdown. For comparison, nearly 250,000 vehicles were sold in the domestic market in April 2019. Indian automakers count the dispatch of vehicles from factories to dealers as sales.

However, as ports resumed operations, some manufacturers managed to restart exports.

The country’s top carmaker Maruti Suzuki India Ltd, and other top manufacturers such as Hyundai Motor India Ltd, Mahindra and Mahindra Ltd (M&M), Toyota Kirloskar Motor India Pvt. Ltd, MG Motor India Pvt. Ltd all reported zero local sales.

“Maruti had zero sales in the domestic market in April 2020. This was because, in compliance with government orders, all production facilities were closed,” the company said in a filing.

Suzuki Motor Gujarat Pvt. Ltd, which makes cars for Maruti Suzuki, had first stopped its second shift on March 23 for two days after a Gujarat government order. When the lockdown began on March 25, the closure was extended till April 14, only to further extend it until May 3.

Though domestic sales remained on pause, Maruti said it exported 632 units from the Mundra port once it reopened. RC Bhargava, chairman of Maruti Suzuki, told Mint in a recent interview that a fiscal stimulus is required to rescue the industry.

Meanwhile, India’s second-largest carmaker, Hyundai, said it exported 1,341 units in April, even as domestic sales remained nil.

Gaurav Vangaal, country lead, light vehicle production forecasting at IHS Markit, said automakers will ramp up production up to 50% of capacity in May and June. “This, however, will depend upon the suppliers coming out of the designated red zones. It will be interesting how original equipment makers cope with the existing BS-IV stock present in the dealership channels and the ramp up of BS-VI inventory after lockdown lifts,” Vangaal said.

M&M’s April exports stood at 733 units. Veejay Nakra, chief executive officer, automotive unit, M&M, said the firm is closely working with component suppliers, vendors and dealer partners to restart the ecosystem. “We are hopeful our dealerships will open soon and have stocks to cover the first few weeks of sale,” said Nakra.

While Toyota Kirloskar too reported nil sales, Naveen Soni, senior vice-president, sales and services, said the revival will be slow.

“Restoration will be gradual as the industry is faced with the challenges of weak consumer sentiment, rebuilding of disrupted supply chains that need factors of production to be restored, including return of workforce,” he said.

 

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