Car sales feel the heat in April, OEMs brace for a tough May

by Mayank Dhingra 02 May 2021


With the second wave of the Covid pandemic underway in India, business and industry are once again taking a hit, with lockdown-like restrictions imposed in several states. Among them, Delhi, Maharashtra, Uttar Pradesh, Karnataka and Jharkhand are the key states with major curbs imposed on people movement and operation of marketplaces, malls as well as vehicle showrooms and service centres.

As a result, the auto industry, which had started seeing the wheels of economy finally turning through the second half of CY2020 through to March 2021, began staring at an April 2020-like situation.

Major carmakers including Maruti Suzuki, Toyota Kirloskar Motor and MG Motor India and two-wheeler OEMs like Hero MotoCorp and Honda Motorcycle & Scooter India have already announced suspension of production at their plants to combat Covid while also running maintenance programmes at their respective manufacturing facilities.

More importantly, these shutdowns also hint at the piling inventory in the entire system as the retail channel is partially blocked due to the lockdown restrictions in critical sales-driving states.

Bearing in mind that April 2020 was a washout month with zero sales across the board, thereby allowing little scope of a year-on-year comparison, let’s take a quick look at the April 2021 sales numbers of key carmakers:

Maruti Suzuki India: 135,879 units
Maruti Suzuki India reported total sales of 135,879 units last month, showing a month-on-month (MoM) decline of 7.1 percent when compared to its performance in the previous month – March 2021 – which stood at 146,203 units.

The duo of Alto and S-Presso went home to 25,041 buyers and the six pack of the WagonR, Swift, Celerio, Ignis, Baleno, Dzire and Tour S registered sales of 72,318 units. While the Ciaz sedan could clock only 1,567 units, the UV pack of Gypsy, Ertiga, Vitara Brezza, S-Cross and XL6 sold 25,484 units.

On April 28, the company announced plans to advance its annual plant maintenance shutdown originally slated for June, to be held between May 1 and 9, in order to allow its vendors to divert oxygen supplies to hospitals.

Hyundai Motor India: 49,002 units
Hyundai clocked domestic wholesales of 49,002 units in April 2021,registerinnga decline of 6.8 percent over previous month’s sales of 52,600 units. However, unlike Maruti Suzuki, some of Hyundai’s models like the Creta SUV are in high demand and command waiting periods of as high as six months in some cities. The carmaker is continuing with production of its cars at its plant in Chennai to meet those customer commitments while ensuring safety of its workforce.

Tata Motors: 25,095 units
Tata Motors registered cumulative despatches of 25,095 units last month, beating the market downturn to record a marginal uptick of 2.3 percent compared to 24,541 units sold in March 2021. But with the current coronavirus situation in the country, the carmaker has announced adopting a ‘Business Agility Plan’ to take swift actions based on dynamic conditions.

In a statement, the company said: “The lockdown enforced in various parts of the country is expected to impact vehicle demand temporarily. Hence, the company has set in motion a comprehensive Business Agility Planto protect and serve the interests of its customers, dealers and suppliers. By carefully calibrating and matching supplies with retail demand, Tata Motors shall ensure that optimal levels of inventory are maintained with dealers to meet whatever customer demands arise and also be prepared for a rebound in demand once the situation returns to normalcy.

Mahindra & Mahindra: 18,285 units
Mahindra & Mahindra despatched a total of 18,285 units in April 2021, comprising 18,186 UVs and 99 cars and vans. The predominant UV player recorded a notable 9.5 percent uptick over March 2021’s 16,700 units sold.

According to Veejay Nakra, CEO, Automotive Division, M&M, “The month of April registered a growth of 9.5% in our passenger vehicles segment as compared to March 2021. With the increase in lockdown restrictions in many parts of the country we foresee continuing supply chain-related production challenges. While demand remains good, there would be some impact in the first quarter as a result of low customer movement and dealership activity due to the lockdown restrictions. In times like these, our focus is the well-being and safety of all our associates and those of our dealers. Our customers will continue to experience unrestricted personalized as well as digital and contactless sales and service support.”

Kia India: 16,111 units
Kia India recorded sales of 16,111 units in April 2021. While the Seltosremains the best-seller with 8,086 units, the SonetSUV and Carnival MPV recorded 7,724 and 301 despatches respectively.However, even with a seemingly robust order book, the company registered a 16 percent month-on-month decline when compared to the previous month when it had sold 19,100 units.

But, with the April 2021 numbers, Kia has crossed the cumulative 250,000-unit sales milestone in India in 22 months from the start of its sales operation, that too with only three products.

Interestingly, after kicking-off its rebranding initiative, the company, introduced the refreshed Seltos and Sonet in the country today with several updates, including hosting the new brand logo on these cars.

However, despite facing some challenges in the supply chain due to the ongoing Covid crisis, Kia India is managing to steer its way through to meet the exploding demand for its aforementioned UV models, and strives to serve markets which are out of the lockdown purview during this period.

In a recent interaction, Harpreet Singh Brar, VP and head of sales and marketing, Kia India, had told Autocar Professional, “Currently, we have a waiting period of 3-4 months on our products and despite all the tough times and lockdowns in five states, we still have a lot of demand from the rest of the markets, so we are trying to supply cars to these cities.

“Having said that, we are closely monitoring the whole pandemic situation and wherever we will have to make any adjustments, we will be doing so.”

Toyota Kirloskar Motor: 9,622 units
The Japanese carmaker with a Karnataka-based manufacturing setup was able to register 9,622 units last month, a significant de-growth of 35.8 percent compared to 14,997 units sold in the previous month.The company, however,is currently implementing its 19-day annual maintenance programme across both its manufacturing plants, from April 26 to May 14.

During this period, operations at both the Toyota factories in Bidadi, which have a combined production capacity of 310,000 units per annum, will witness a temporary halt, impacting supply of vehicles produced.

According to Naveen Soni, senior vice-president, TKM, “At the outset we express our solidarity and continued support for the community at this hour of peril. Given the current situation and considering all those who have been impacted by the second wave of the pandemic, what is most important to TKM is the wellbeing and safety of our employees, dealer and supplier staff and the community at large.”

“Despite the challenges, we continue to witness good demand owing to personal mobility needs and the same has helped us clock 9,622 units of wholesales in April 2021. We have been able to partially fulfil the pending orders by making use of the pipeline finished goods inventory, so as to ensure minimal discomfort to our customers.

“However, partial lockdown in different parts of the country has enhanced the gap between wholesale and retail. Also, sporadic lockdowns impacting different states and cities for varying durations has increased logistical challenges to supply the right vehicle to the right dealership and at the right time. We are trying our best to work around such logistical challenges so as to be able to meet customer requirements at the earliest.”

Honda Cars India: 9,072 units
For the Japanese carmaker, April numbers were pegged at 9,072 units, registering a 27.7 percent month-on-month uptick over March 2021’s 7,103 units. The company says it is closely working with its stakeholders to tide through the current situation. According to Rajesh Goel, SVP and Director, Marketing and Sales, Honda Cars India, “The current health calamity has struck the entire nation and at this time nothing is more important than the health and well-being of our countrymen. 

“Of course, it has had an impact on the business and deliveries in the marketplace. Many parts of the country have been on safety related lockdowns in the last couple of weeks and we see this continuing in the month of May 2021 as well. We are working closely with all our stakeholders and assisting in every possible way to tide through this situation.”

MG Motor India: 2,565 units
The Gujarat-based carmaker registered retail sales of 2,565 units, thereby recording a substantial dip of 54 percent on a month-on-month basis, when its March 2021 volumes were pegged at 5,528 units.  However, the company claims its production and vehicle despatches to dealers were “significantly higher”.

The carmaker says that while it does not see any deterioration in demand, supplychain constraints are likely to continue in the month of May 2021. The production will be impacted by the shortage of semiconductor chips globally and the limitation in working hours due to curfews and lockdowns in various parts of the country.

 As a result of the lockdown, sales during the last 15 days of April 2021 were also impacted. However, MG Motor India’s production and vehicle dispatches to dealers were significantly higher than retail sales, with the carmaker currently having an order backlog of over 3 months across its product lines.

The company has also stated in a press statement that it is left with no stock of cars currently at its Gujarat plant. Furthermore, MG Motor India is observing a complete shutdown of its plant operations between April 29 and May 5.

Growth outlook
Compare April and March 2021 sales numbers and it is apparent that growth is slowing down, which is a pity because the industry was just about seeing the green shoots of recovery.

With both Maruti Suzuki and Hyundai Motor India seeing month-on-month declines, overall industry numbers are bound to be impacted. With sales in the first half of May 2021 most likely to be impacted, what with key vehicle-buying states like Delhi announcing an extension of the ongoing lockdown, and Maharashtra as well as Karnataka also enforcing the preventive measure to break the chain of the transmission, carmakers will find the going tough.

However, with nearly all OEMs having gone hybrid in their retail model and expanded into digital operations, expect their sales divisions to target car buyers in the comfort of their homes. One thing is for sure – online and digital retail will be buzzing in May.