Car Sales Fell By 48% Between January-May 2020; Industry Saw 84% Decline In May: Report

The Indian passenger vehicle industry and registered a 48 per cent decline in Year-To-Date (YTD) vehicle sales, in the 2020 calendar year, as per the data shared by automotive insights and analytics provider, JATO Dynamics India. Between January and May 2020, the industry sold 6,89,000 passenger cars in India, a 48 per cent decline, as compared to the 13,15,000 vehicles sold during the same period in 2019. After witnessing zero domestic sales in April due to the coronavirus pandemic and the resultant lockdown, JATO says that manufactures started dispatching vehicles to dealers in May 2020.

Speaking to carandbike, Ravi G Bhatia, President & Director JATO Dynamics India, said, "The industry was already under pressure, and the BS4 to BS6 transition became slightly more difficult for the industry then it should have been. Because the Supreme Court did not allow the extensions, and there was a lot of customer confusion in the market. To compound the troubles of the automotive industry, we saw the COVID impact also happening, where India was one of the unusually harder lockdowns. Therefore, the impact on India is also much higher, because what we saw was a two-pronged problem. One was the supply chain, because China is a key contributor to the supply chain, and the second challenge was the shutdown of the retailing window. So, as a result, manufacturers almost did not dispatch any car in April, and we saw the zero figure happening, which mind-boggling and unbelievable number, and we saw hardly about 4000 cars being registered, which was really the tendency from April 1. In May we have seen some efforts from the manufacturers to restart the operations and about 37,000 odd cars made, and we had a similar number in retail. So, while January was a good month, February was ok, March onwards the trouble really compounded, so we have a 48 per cent YTD shortfall and 84 per cent MTD shortfall for May."

During the month of May 2020 alone, the domestic passenger car industry registered a decline of 84 per cent in vehicle sales. Last month, the passenger car industry cumulatively sold a total of 36,697 cars, as against the 2,36,500 units sold in May 2019. OEMs also started reopening their dealerships for business in early May, and according to JATO, the primary focus was to service the existing bookings.

 In May the industry saw some efforts from the manufacturers to restart the operations

Summarising the reason for this shortfall, Bhatia further added, "Clearly, it's a combination of three factors which JATO tracks, which is weak economy, very tight credit conditions - pre-COVID and post-COVID even more compounded - because people are talking about delinquencies because of the loan moratorium which was announced. So, basically, we will see lender hesitating to lend, and the rescue package is not focused on the automotive industry at all so far."

Maruti Suzuki India sold 13,865 units in the domestic market witnessing a decline of 88.95 per cent in May 2020

The country's largest car manufacturer, Maruti Suzuki India sold 13,865 units in the domestic market witnessing a decline of 88.95 per cent in May 2020 as compared to 1,25,552 units sold in the same month last year. On the other hand, Hyundai India sold 6,883 units in the domestic market, witnessing a 78.7 per cent drop in sales, as compared to the 42,502 units sold in May 2019. At the same time, Toyota retailed a total of 1,639 units, Mahindra sold 3867 units, and Honda's domestic sales stood at 3697 units.