Indian automobile industry feels BS-VI and coronavirus jitters, FY20 domestic volumes drop by 18pc

Production in the Indian automobile sector dropped by nearly 15 percent to 26,362,284 units in FY 2019-20.

The Indian automobile sector registered a drop of nearly 18 percent in domestic sales in the financial year 2019-20. As per the latest data released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger vehicle, commercial vehicle, three-wheeler, and two-wheeler sales stood at 21,548,494 units in FY 2019-21. In comparison, volumes for fiscal 2018-19 stood at 26,266,179 units.

Passenger vehicle sales fell by almost 18 percent from 3,377,389 units in FY 2018-19 to 2,775,679 units in FY 2019-20. While passenger cars volumes slipped by over 23 percent, utility vehicle sales grew by 0.48 percent, buoyed by new launches like the Kia Seltos and MG Hector.

India is the world’s largest two-wheeler maker, and the shaky macro-economic environment in the country saw volumes falling by 17.76 percent from 21,179,847 units in FY 2018-19 to 17,417,616 in FY 2019-20. Suzuki is the only two-wheeler maker in India which ended the year in green.

Last month, due to the ongoing coronavirus pandemic-related lockdown and the BS-IV to BS-VI transition, the industry witnessed one of its sharpest decline in domestic sales.

Speaking about the March 2020 volumes, Rajan Wadhera, President of SIAM, said, “The month of March 2020 was one of the most challenging months for the auto sector as the 21-day lockdown resulted in bringing the production and sales of vehicles to a standstill in the last week. As the revenue took a severe hit, the OEMs struggled on meeting fixed cost and working capital requirements.

He added that the Indian auto industry has already been reeling under severe de-growth, and the pressure of disrupted supply chain only aggravated the situation. As per SIAM’s estimates, the auto industry is losing Rs 2,300 crore in production turnover for every day of closure.

He added, “The auto industry is engaged in a dialogue with the Indian government on policy measures which could minimise the impact of COVID-19 on the Indian economy, and especially the Indian automobile industry. There would be challenges on the supply side, demand side, and also on the issue of availability of finance, which would all need to be addressed to bring back growth in the sector.”

Commercial vehicle sales in FY 2019-20 fell by 28.75 percent from over a million units (FY 2018-19) to 717,688 units. Three-wheeler sales during the same period stood at 636,569 units, dropping by 9.19 percent.

Edited by Suman Singh


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