COVID-19: Truck sales take a hit in March due to lockdown 

All the major truck makers reported a massive drop in monthly sales. Truck sales typically take place towards the fag end of the month, and it washed out due to lockdown.

The last month of FY'20 turned out to be disastrous for truck makers as monthly sales dropped substantially to the lowest ever yet. The overall slowing economy and the adverse impact of BS6 was already weighing heavy on truck sales when the COVID-19 belted a severe blow.  The 21 days lockdown came into effect from 25th March halting all activities; the last week of the month is crucial as the bulk of the sales take place in those days when the lockdown came into effect.

Tata Motors, M&M, Ashok Leyland, VE Commercial Vehicles March sales crashed up to 90%, this also dragged down their FY'20 numbers considerably, which declined by strong double-digit as compared to FY'19.

So, what is in store for the truck maker in the new fiscal year? It is early days as yet, but given the precarious economic outlook, new emission transition will drag the industry down in the near-term, before some steam returns to the market. Also, the COVID lockdown will take considerably longer for the economy to get on track.

Amidst ongoing bloodshed in the market, one good news is that all the truck makers have exhausted their BS4 stock at the factories, this certainly eases a lot of financial burden for companies. However, marginal BS4 is still stuck at retail points due to lockdown which seems manageable.

OEMs have already started partial production of BS6 trucks and ready for full-scale manufacturing, which is likely to kick-start once the lockdown is lifted. 

Speaking on the company's performance in the month, Girish Wagh, President, Commercial Vehicles Business Unit, Tata Motors said, "Cumulatively, commercial vehicle domestic sale for FY20 at 3,10,855 units was -34% lower than FY19. Retail was 16% higher than offtake for the entire year.  Domestic sales in March 2020 was 5,336 units, deeply impacted by the COVID 19 lockdown as well as the planned transition to BSVI. Retail sales were significantly ahead of wholesales (>300%). Almost all BSIV vehicles in the ecosystem have been retailed, however, some await registration which was halted due to the lockdown. This will be cleared in the window provided. Productionization of BSVI vehicles was on track and we have wholesaled the initial few BSVI vehicles. Our focus is to secure the extensive business continuity plan including ensuring full support to all our customers in need, particularly those who are transporting the essential goods during this challenging period"

Commenting on the performance, Veejay Ram Nakra, Chief of Sales and Marketing, Automotive Division, M&M, said, "Our performance in March has been muted on account of the impact of the current lock-down related to Covid-19 and the disruption in our BSVI ramp-up plan. The latter was planned between February and March but was affected due to the challenges of parts supply from global and local suppliers. We have been able to clear our BS IV inventory, but for fewer than 100 vehicles. However, there are many vehicles that are sold, but not yet registered because of the closure of RTOs."

OEMs sales in March

The market leader Tata Motors' overall domestic commercial vehicle sales declined by 90% to 5,336 units in the month. (March 2019: 50,917 units). The M&HCV truck tank 90% to 1,6,01 units. (March 2019: 15,327 units). The ILCVs down by 85% with a total sale of 1,033 units, the cargo SCVs and pickups registered a fall of just 95% to 1,065 units. The company exported a total of 1,787 units in the month, a drop of 68%. In FY2020, Tata Motors sold a total of 3,10,855 units down by 34%. (FY19: 4,68,692 units).

Ashok Leyland's domestic sales declined by 91% to 1,787 units. The M&HCVs sales decreased by 90% to 1,498 units; the trucks were down 93% while the buses 71%, by selling 8,99 units and 5,99 units, respectively. The LCVs were dropped by 95% to 2,89 units. The total domestic sales for FY'20 reported by Ashok Leyland stands 1,16,333 units (-37%) against FY'19: 1,85,065 units.

Mahindra & Mahindra's overall CV sales declined 90% to 2,325 units. The M&HCVs dropped by almost 100% to just 4 units. The below-3.5T GVW segment sold 2,234 units down 90% and those in the above-3.5T GVW segment were declined by 92& with a sale of 87 units. M&M cumulative sales for FY20 stands 1,99,135 units (-20%). (FY’19:2,48,601 units)

VE Commercial Vehicles domestic sales declined by 81 % in the month; the company sold 1,409 units in the domestic market. (March 2019: 7,329 units). The firm reported total domestic sales for FY'20 of 43,036 units a drop of 30% (FY'19: 61,733)