Auto companies report zero sales in April as economic engine falls

For the first time in the history of the automobile industry, companies have reported zero domestic sales and limited exports, as factories remain closed due to the Covid-19 lockdown.

For instance, the country’s largest passenger car maker Maruti Suzuki India on Friday said it reported zero sales in the domestic market in April. This was as a result of it complying with the government order to close all production facilities, it said.

“Meanwhile, following resumption of port operations, the first export shipment of 632 units was undertaken from the Mundra port, ensuring that all guidelines for safety were followed,” the company added.

Maruti Suzuki had sold 1,31,385 units in April last year.

Some exports

Similarly, Hyundai Motor India, said it exported 1,341 units in April. However, domestic sales were nil amid the lockdown due to the pandemic. The company had sold 42,005 units in the corresponding month last year.

Mumbai-based Mahindra & Mahindra also reported zero domestic sales during the month, but exported 733 vehicles. The company had sold 41,603 units (utility + commercial vehicles) in April 2019.

“At Mahindra, we are working hand-in-hand with all stakeholders, especially our dealer and supplier partners, to get our ecosystem started, once the lockdown is lifted. The safety of all our employees will be of paramount importance to us while resuming our operations,” said Veejay Nakra, Chief Executive Officer, Automotive Division, Mahindra & Mahindra.

He said the company was hopeful that its dealerships would open soon and have stocks to cover the first few weeks of sale.

Many companies did not report sales as some of them do not export. And, companies like Tata Motors had decided to stop reporting monthly wholesale numbers from April and, instead, report quarterly wholesale and retail numbers.

Meanwhile, the auto industry representatives on Friday wrote to the Ministry of Home Affairs to allow the sector to resume operations.

“Considering the fragile health of the automotive industry, as also its economic contribution, we are writing to request you to kindly allow the entire automotive value chain for opening up and re-commencing operations,” they wrote.

This would include vehicle manufacturers (OEMs), component suppliers, dealers and service workshops.

“In fact, auto dealerships/ workshops will not be able to open till such time the citizens are not allowed to come out of their homes freely. The industry needs to be treated akin to ‘essential services’ and be allowed to function as has been done in case of steel and cement sectors,” they said.

Joint plea

The joint submission went from the Society of Indian Automobile Manufacturers (SIAM), Automotive Component Manufacturers Association of India (ACMA), and the Federation of Automobile Dealers Associations (FADA).

They added that the automotive industry was already facing a severe downturn for over 15 months, and with the lockdown, the sector is losing revenue of ₹2,300 crore per day.

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