Commercial Vehicles sales tumble 29% in FY’20; heavy trucks record steep fall  

Industry body SIAM reported the sales number for the fiscal year 2020. Sustain economic slowdown, the transition to BS6 and COVID-19 weighed heavily on the industry with a sharp fall of sales across segments.

The fiscal year 2019-20 is among the most challenging year for the automotive industry. Amid multiple headwinds, the year recorded a sharp decline in overall sales across segments. The commercial vehicle industry was among the worst performer as demand for heavy-trucks; the biggest and most crucial category plunge as fleet-operators stayed away from buying new trucks due to economic slowdown. 

- The cumulative sale of commercial vehicle sales was 717,688 units in April-March 2020 compared to 1,007,311 units in April-March 2019, down by 28.75%.
- Similarly, the 3W industry sales was 636,569 units in April-March 2020 compared to 701,005 units in April-March 2019, a drop of 9.19%.
- In the month of March-2020 in which automakers forced to shut-down plants due to COVID-19 recorded the worst sales ever. The overall commercial vehicle sales was 13,027 units in the month compared to 109,022 units in March 2019, marking a drop of massive 88.05%.
- Three-wheeler sales was 27,608 units in March 2020 compared to 66,274 units in March 2019 marking a decrease by (-) 58.34%

Production:

The industry produced a total 26,362,284 vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycle in April-March 2020 as against 30,914,874 in April-March 2019 with a decline of 14.73%

Exports

In FY’20, the industry exported a total of 60,713 units of commercial vehicles against 99,933 units registering a drop of 39%. The 3W Industry exports a lot of its production to key African countries shipped a total of 5,02,169 units in the fiscal year against 5,67,683 units recording a dip of 11.5%.

Plant shut-down hurting the industry  

The industry was already reeling under severe degrowth and the pressure of disrupted supply chain, which was followed by a majority of the auto companies announcing a shut-down of their manufacturing units in the last week of March 2020, due to concerns over ensuring workplace safety & health of their employees. SIAM estimates, the Auto industry is losing Rs 2,300 crore in production turnover for every day of closure.

Commenting on the March sales, Rajesh Menon, Director General, SIAM stated, “Automobile industry witnessed one of its sharpest decline in domestic sales in March 2020 due to subdued demand and consumer sentiments which were further aggravated by the COVID-19 outbreak in the country.”

Rajan Wadhera, President, SIAM, said, “The month of March 2020 was one of the most challenging months for the auto sector as the 21-day lockdown resulted in bringing the production and sales of vehicles to a standstill in the last week. As the revenues took a severe hit, the OEMs struggled on meeting fixed costs and working capital requirements.

The Auto Industry is engaged in a dialogue with the Government of India on policy measures which could minimize the impact of COVID on the Indian economy and especially the Indian Automobile Industry. There would be challenges on the supply side; demand-side and also on the issue of availability of Finance which would all need to be addressed to bring back growth in the Sector.

Also Read:  COVID-19: Government take steps to ensure trucks move across India seamlessly