June auto sales flag road to recovery

Automobile makers posted an uptick in wholesale sales in June compared with May and April (when sales were zero), driven by pent-up demand, particularly from consumers in rural and semi-urban markets, as the economy gradually reopened.

Sales were, however, still significantly lower than in the year-earlier period for most companies. Tractors continued to see strong demand with Mahindra & Mahindra and Escorts bettering even the June 2019 sales.

M&M sold 35,844 tractors in the domestic market, a growth of 12% from the 31,879 units sold in June 2019. “This is our second highest June sales ever,” said Hemant Sikka, president, Farm Equipment Sector. “Timely arrival of the monsoon, combined with benefits of a record Rabi crop, government support for agri initiatives and very good progress in the sowing of the Kharif crop led to a positive sentiment among farmers.”

Escorts sold 10,623 tractors in India, up 22.8% from 8,648 in June 2019.

Passenger vehicles

The improved rural demand was visible in the passenger vehicle segment too.

Maruti Suzuki sold 51,274 passenger vehicles in the domestic market last month, almost 54% lower than over 1.13 lakh units in June 2019; but higher than about 13,800 in May 2020. “With this, the company closed the first quarter of FY21 with total sales of 76,599 units,” it said in a statement. Hyundai Motor sold 21,320 vehicles in the domestic market, as against cumulative sales of 12,583 units in May 2020. Last month, the company exported 5,500 units.

M&M sold 8,075 passenger vehicles and 10,417 commercial vehicles last month in the domestic market. “The automotive industry has started to see recovery both in the passenger and small commercial vehicle segments,” said Veejay Nakra, CEO, Automotive Division. “This has been led primarily by rising rural demand and movement of essential goods across the country.”

Hero MotoCorp reported a 26.9% year-on-year dip in sales last month at over 4.5 lakh units. Dispatches, however, grew fourfold from May’s 1.12 lakh units. The firm said it had reached 90% of the pre-COVID level sales, adding it indicated demand revival.

TVS Motor sold over 1.44 lakh two-wheelers in the domestic market. “The market is opening up gradually post the lockdown, and we are witnessing a positive uptake in both domestic retail as well as exports,” the company said. Observing that it had faced supply chain constraints in June, TVS Motor said it took countermeasures, some of which started yielding results in June. “[We expect] to overcome these in July,” it added.

Commercial vehicle maker Ashok Leyland reported an 81% dip in volume to 2,394 units in June.

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