Car sales expected to decline amid second wave | Economic Times

With several state governments announcing or extending restrictions to check the spread of the coronavirus pandemic and top automakers temporarily closing plants, automobile dealers expect vehicle sales this month to fall further from April. Automobile sales had declined in double digits sequentially last month, mainly due to the restrictions imposed by local administrations. The industry had recorded zero sales in April last year due to a nationwide lockdown.With nine states including Maharashtra, Delhi, Karnataka, Haryana, Madhya Pradesh, Rajasthan and West Bengal imposing curfews, almost 45-50% of the automobile retail network currently remains shut. Several dealers ET spoke to said walk-ins in markets that were open had also dropped by 35% in the passenger vehicle segment and 75% in two-wheelers in the past few weeks. There are around 26,500 automobile outlets in India.“Walk-ins have dropped drastically, firstly because of localised lockdowns and also because of the increase in the number of containment zones in other major markets,” said Vinkesh Gulati, president at the Federation of Automobile Dealers’ Association, adding: “While in the passenger vehicle segment, we expect demand to bounce back once lockdowns ease, in two-wheelers and commercial vehicles, demand has been hit badly.”82376932Most carmakers currently are sitting on an order book of several months. Maruti Suzuki chairman RC Bhargava said last week the company expected demand for personal mobility to strengthen further with the second wave of the pandemic. The company itself has an order backlog of 200,000 units but has advanced its annual maintenance shutdown to May 1-9 to help divert industrial oxygen from its and component suppliers’ plants for medical needs. Hero MotoCorp, HMSI and Toyota Kirloskar Motor too have suspended operations given the surge in cases.Gulati also said: “In the passenger vehicle segment, we are not expecting a loss in sales as most models are in short supply. Dealers are taking deliveries from manufacturers to close sales once lockdowns are eased. However, in the two-wheeler segment, sales have fallen sharply as this time even rural markets have got affected.”Two-wheeler retailers traditionally clock brisk business in April and May on account of Navratri and the marriage season. Inventory levels of two-wheelers have surged to 55-60 days. The industry norm is to maintain stocks for three-four weeks. In PVs, inventory is mostly within the range at 20-30 days.