February car, SUV sales down 8 percent; Coronavirus threat looms

    Overall industry sales declined 19 percent year-on-year in the month of February.

    Published On Mar 14, 2020 06:00:00 AM

    6,869 Views

    February car, SUV sales down 8 percent; Coronavirus threat looms

    All vehicle segments in India, barring passenger vehicles (PVs), registered a double-digit decline in sales last month, with no green shoots to be seen in the near-term and concerns rising on the sustainability of production with the impact of BS6 components supplied from China.

    Amidst all the concerns affecting public health, stock markets and the economy, results of the Indian automotive industry's overall sales and production for last month are anything but cheerful. Overall domestic sales of the industry dived 19 percent in February, at 16,46,332 units (February 2019: 20,34,597).

    In terms of performance of the individual vehicle segments, while passenger vehicles (PVs) recorded the least decline of 7.61 percent at 2,51,516 units (2,72,243), commercial vehicles (CVs) were the worst hit at nearly 33 percent de-growth with cumulative M&HCV and LCV sales culminating at 58,670 units (87,436). Within two-wheelers, while motorcycles went home to 8,16,679 buyers (10,47,356 / -22.02 percent), scooters performed relatively better at 4,22,310 units (4,92,584 / -14.27 percent).

    Speaking to our sister publication, Autocar Professional, recently, Nikunj Sanghi, director, International Affairs, FADA, said, "The market is still very fluid, and our immediate focus is to liquidate the BS4 inventory. While some pre-buying is going on, after March 10, it would be hara-kiri. Especially in the passenger vehicle and commercial vehicle segments, dealers of most manufacturers are confident of clearing the (BS4) stocks by March 10, but two-wheelers are still reeling under tremendous pain."

    "Internally, we are keeping a deadline of March 15 to be on the safe side as there are varying degrees of processes to get a vehicle registered and apparently, the NIC will block registration of BS4 on March 31. So, the permanent registration process will need to be completed much in advance," he said.

    Sanghi further explained that the majority of the dealers would clear the BS4 stock in their books, but if there is any leftover inventory, drastic measures will be called for in the form of heavy discounts, or even registering the vehicles in the name of their employees to later be sold as second-hand vehicles. This is going to bring a huge additional cost to dealers.

    With a price hike on account of Bharat Stage 6 being in the range of 9-13 percent on two-wheelers and anywhere between 3-5 percent on petrol-powered passenger vehicles, there is uncertainty with regard to their acceptance by the end-consumer.

    "We are not sure how BS6 is going to be received because of the price hike, which has been happening, but not to the extent that it was made to believe. Maybe, some companies are initially absorbing a part of price increase and will pass it on to the consumer later on," said Sanghi.

    For the 11-month perspective of the current financial year between April 2019 and February 2020, the industry produced a total 2,49,14,836 vehicles as against 2,87,34,671 units during the same period in last financial year, thus, recording a 13.29 percent decline.

    In terms of sales during this 11-month period, PV sales stood at 26,32,665 units (April 2018-February 2019: 30,85,528 / -14.68 percent); CV sales at 7,04,661 units (8,98,289 / -21.56 percent); three-wheeler sales at 6,08,959 units (6,34,731 / -4.06 percent) and two-wheeler sales culminated at 1,65,50,770 units (1,97,39,254 / -16.15 percent), leading to an overall decline of 16 percent with cumulative total of 2,04,98,128 units (2,43,58,082).

    According to Rajan Wadhera, president, SIAM, “The decline in wholesale dispatches is primarily due to economic slowdown and lower production of BS4 vehicles. Some upside on the registration numbers of VAHAN can be attributed to last-minute purchases by customers trying to advance purchase of BS4 vehicles.”

    “Supply-chain disruption from China is also a concern, which may impact production plans for companies going forward. The auto industry is grateful to the government for issuing a notification of force majeure for Coronavirus and 24x7 clearances of shipments at all customs formations.”

     

    Also see:

    Toyota claims Innova Crysta, Fortuner sales dominate respective segments

    New bike, scooters to come with two helmets soon

    Ferrari factory continues operation despite Covid-19-related quarantine measures

    Coronavirus outbreak to impact Indian carmakers’ BS6 production

    Copyright (c) Autocar Professional. All rights reserved.

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