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BW Businessworld

Second Wave of Covid Cripples Passenger Car Sales

The popular mini cars and compact category bear the brunt as all carmakers suffer a massive decline in May sales data.

Photo Credit : Reuters

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The second wave of coronavirus has severely dented the domestic sales of the already struggling automotive industry in India. While every major carmaker has reported a high double-digit decline in their sales data for the month of May 2021, the numbers simply nosedived when sequentially compared with the April data which now looks much better in comparison. 

Take for example Maruti Suzuki India (MSI), India's largest carmaker that heavily depends on the sales of its mini and compact categories. It reported a massive drop of 81 per cent for its mini cars category that has Alto and S-Presso as the sales driver. From selling 25,041 units in April, the May numbers were only 4,760 units. 

Hyundai, the second-biggest carmaker after MSI also reported 49 per cent drop in its domestic sales—from 49,002 units in April to 25,001 units in May without elaborating on segment-wise sales as it is not a listed entity in India. 

The next big carmaker, Tata Motors, also witnessed its car sales fall by 40 per cent over April. Tata Motors passenger vehicle division sold 15,181 units in May, down 40 per cent over April. "Year-on-year the domestic sales are not comparable because of covid led lockdown last year," it said. Overall Tata Motors’ domestic sales fell 38% to 24,552 units in May from 39,530 units it sold in April. 

Mahindra & Mahindra passenger vehicles business witnessed a 56 per cent drop in car sales—from 18,285 units sold in April 2021, it sold only 8,004 units in May. 

Mitul Shah, Head of Research at Reliance Securities explained: "Volume was impacted due to Covid second wave led disruptions and lock down in many regions during the month. This impacted retail sales, while inventory built up by OEMs in anticipation of strong June sales led to better wholesale Volume." 

Even the other important segments within passenger cars saw a big decline as can be gauged from the detailed numbers posted by MSI. Sales of compact segment vehicles, including Swift, Celerio, Ignis, Baleno and Dzire for Maruti declined by 72 per cent (20,343 units from 72,318 cars in April). 

Even the sales of Maruti's mid-sized sedan Ciaz declined to 349 units as compared to 1,567 units in April this year. Utility vehicle sales, including Vitara Brezza, S-Cross and Ertiga, declined 75 per cent to 6,355 units as against 25,484 in April, MSI said. Exports in May were down 35 per cent at 11,262 units as against 17,237 units in April this year.