Annual data from the auto industry authority on Monday showed that the coronavirus pandemic has pushed passenger car sales in India to their lowest in six years, as the sector braces for more fallout from the recent spike in cases.
India on Monday overtook Brazil to become the second hardest-hit country in the world, with daily COVID-19 infections soaring and less than 4% of its 1.4 billion people vaccinated.
Kenichi Iokawa, president of the Association of Indian Automobile Manufacturers (SIAM), said that the Indian automobile sector was already facing a “deep structural slowdown” even before the pandemic, and together this had driven down sales for many years.
“Recovering from here will require time and effort from all stakeholders,” said Iokawa, who is also managing director of Maruti Suzuki, India’s largest automaker by sales.
Passenger car sales fell 2.24% in the fiscal year ending March 31, 2021 to 2.71 million, with automakers such as Ford Motor and Volkswagen registering a drop of more than 20% compared to an 8.5% drop for its local competitor Maruti, which sells one in two. Cars in India, data from SIAM showed.
This was offset by higher sales of new entrants such as Kia Motors and the British brand MG Motors of SAIC Motor Corporation, as well as its local rival Tata Motors.
The data showed that truck sales, a measure of economic activity, fell 21% to an 11-year low, while motorbike and scooter sales fell 13% to their lowest level in seven years.
Iokawa said the auto industry is pushing production and sales to the limit, but supply chain disruptions and a second wave of injuries are making the future difficult to predict.
In some states such as Maharashtra, which is home to the financial capital Mumbai and one of India’s largest auto manufacturing centers, the government has already imposed restrictions such as night curfews to limit the spread of the virus.
Fears of a complete shutdown, similar to what happened in 2020, worry investors.
The Nifty Automotive Index closed 5.11% lower on Monday, while the broader market closed 3.5% lower. Tata Motors fell 10%, while Mahindra & Mahindra and Maruti Suzuki closed down about 5%.
Before the second wave, the auto sector was seeing a pickup in sales, despite challenges such as a shortage of semiconductors and rising raw material costs.
SIAM data showed domestic passenger car sales in March topped 290,000, compared to 281,000 in February and 276,000 in January.
More to track …
Bulletin Observer Business News
We are sorry that this post was not useful for you!
Let us improve this post!
Tell us how we can improve this post?