- India’s top automakers posted lower sales in February as they prepare to face the supply shortage due to CoronaVirus and strict emission standards
India’s top automakers posted lower sales in February as they changed production to prepare for an imminent shift to vehicle production capable of meeting stringent emission standards even as they are grappling with supply chain challenges due to the coronavirus epidemic.
Data released by Maruti Suzuki India Ltd, Hyundai Motor India Ltd, Mahindra and Mahindra Ltd (M&M) and Tata Motors Ltd last month showed total sales of 197,080 vehicles, down 12 percent from 224,241 units sold a year earlier.
Auto sales are assessed as dispatch to the dealerships by wholesales or factory.
Sales at the top carmaker, Maruti Suzuki, fell to 133,702 units in February, 2.3 percent year-on-year. Second-ranked Hyundai reported a decline to 40,010 vehicles of 7.2 percent. Passenger vehicle sales fell from a year earlier in February to 12,430 vehicles at Tata Motors, though M&M saw a 58 percent decrease to 10,938 units.
“The Covid-19 outbreak in China and a recent fire incident at one of our strategic vendors affected vehicle production and wholesale volume,” said Mayank Pareek, chairman of the passenger vehicle business unit at Tata Motors, referring to Varroc Lighting Systems Ltd’s plant in Hinjewadi, Pune, which was laid waste on 18 February.
M&M has struggled to arrange parts from China even as it works towards ramping up vehicle production compliant with Bharat Stage-VI (BS-VI) emission standards, which will come into force on April 1st. The coronavirus outbreak has caused several plants to shut down factories in China’s Wuhan— the epicenter of the deadly virus and home to several automotive plants. Some are reopening slowly, though with considerably less attendance.
Veejay Ram Nakra, head of sales and marketing at M&M’s automotive division, said: “The ramp-down of the production of BS-IV vehicles was in line with our February schedule.
However, our BS-VI ramp-up was hampered due to the unforeseeable challenges on China’s supply of components. This resulted in a high degree of decline in our February billing volume and our inventory of dealers is now below 10 days.
“Going into March, we expect the parts supply problem to continue for a few more weeks until we return to normalcy.” Gaurav Vangaal, Associate Director, Light Vehicle Manufacturing Forecast, IHS Markit, said that since this is the first time that car manufacturers have seen such a major jump in mandatory emission standards, they are struggling to locate critical parts in India to meet the stiff deadlines.
Mayank Pareek, President, Tata Motors Ltd., Passenger Vehicles Business Unit, said the Covid-19 outbreak in China and a recent fire incident at one of the strategic vendors affected vehicle production and wholesale volumes.
“Various steps are being taken to reduce the effect, staying close to our customers by ensuring the distribution situation is clear,” he said.
Girish Wagh, Chairman, Tata Motors Ltd, Commercial Vehicles Business Unit, said domestic sales of commercial vehicles in February were 35 percent lower than last year.
The supply disruptions from the Covid-19 outbreak in China could have some effect on the BS-VI transition, and all efforts to mitigate it are underway, he added.
