Auto sales down 19.08%; economic slowdown, BS-VI transition take a toll



Automobile sales across categories declined last month with carmakers aligning stocks ahead of the industry’s transition to BS-VI emission standards in the new fiscal year beginning April 1 amid a slowdown in the broader economy. The outbreak of coronavirus additionally disrupted the supply of components from China, affecting production at several automakers in February.

Sales of passenger vehicles dropped 7.61% to 251,516 units in the month under review, shows data available with industry body Society of Indian Automobile Manufacturers (SIAM).

While wholesale volumes of commercial vehicles fell 32.9% to 58,670 units in February, those of two-wheelers declined 19.82% to 1,294,791 units. Demand for scooters dropped 14.27% to 422,310 units last month, that for motorcycles by 22% to 816,679 units.

“The automobile industry continues to face hardship due to steeper decline in production and wholesale dispatches in all segments in February 2020,” said Rajesh Menon, director general, SIAM.

Automakers in India report wholesale dispatches from factories and not retail sales made to customers.

“The decline in wholesale dispatches is primarily due to economic slowdown and lower production of BSIV vehicles. Some upside on the registration numbers of VAHAN can be attributed to last-minute purchase by customers trying to advance purchase of BSIV vehicles,” SIAM president, Rajan Wadhera, said.

Additionally, production at several automakers including Hero MotoCorp, TVS Motor Company, Tata Motors, and MG Motor India was affected due to disruption in the supply of components from China. “Supply chain disruptions from China are also a concern, which may impact the production plans for companies going forward. The auto industry is grateful to the government for issuing a notification of Force Majeure for Coronavirus and 24x7 clearance of shipments at all customs formations”, added Wadhera.

Vehicle sales across categories declined 19.08% to 1,646,332 units in the month under consideration.

News Source: Economic Times, Url: https://bit.ly/3abvNqs

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