From slowdown to lockdown: India's car sales plunge

The government last week sent India into a 21-day lockdown to try to curb the spread of the virus, forcing automakers such as Maruti Suzuki (MRTI.NS), Mahindra & Mahindra (MAHM.NS), Ford Motor Co (F.N), Toyota Motor Corp (7203.T) and Hyundai Motor Co (005380.KS) to suspend manufacturing.

Maruti, which sells one in every two cars in India, said it sold 83,792 in March, down 47% from a year earlier, although it said the number was not comparable with 2019 due to the suspension of operations from March 22.

“The shutdown started only last week, so the fall is still steep even if it is not comparable,” said Shashank Kanodia, an auto analyst at ICICI Securities.

Mahindra, maker of popular sport-utility vehicles such as Scorpio, posted an 88% slide in sales.

Tata Motors (TAMO.NS) said its passenger vehicle sales for March fell 68%, while sale of trucks and buses slumped 87%.

Tata said in future it would report sales numbers once a quarter instead of monthly to “avoid needless short term volatility” and help investors “focus on the long term drivers of the business”.

Last fiscal year, India’s Nifty auto index .NIFTYAUTO tumbled nearly 44% as slowing economic growth and the rising cost of car ownership made consumers reluctant to spend and auto sales hit record lows.

Toyota said total sales in March fell 59% to 8,022 vehicles while Hyundai, India’s second-largest carmaker, sold 32,279 vehicles - a 47% drop compared with a year earlier.

The country’s auto industry was already facing a slowdown in demand and government rules to adopt tougher emissions standards had forced carmakers to hike prices, driving customers away.

The Society of Indian Automobile Manufacturers, an industry body, estimates plant closures by automakers and auto part manufacturers will lead to a daily revenue loss of more than 23 billion rupees ($305 million).

The coronavirus outbreak has infected nearly 800,000 people worldwide and caused more than 38,800 deaths, according to a Reuters tally. In India, 38 people have died from 1,637 confirmed infections.

In March, as financial markets across the globe were battered by fears of the economic impact of the virus, India’s auto index slumped 31.47%.

Sales at truck manufacturer Ashok Leyland (ASOK.NS) crashed 90%, and Eicher Motors (EICH.NS) which makes Volvo trucks said its sales fell nearly 83% in March.