NEW DELHI: The car industry wrapped up one of its toughest year to date, closing 2020 with positive numbers in December, indicating that consumers have been buying cars despite the pressures on economy and jobs due to coronavirus vagaries.
Car companies were the worst hit when the coronavirus spread started surfacing around the middle of March 2020. Just like other industries, sales here too slipped to zero in April, and remained tough to come by in the subsequent months.
However, as personal mobility started gaining traction due to social distancing and fears around corona spread, the buyers started coming back, leading to a growth in numbers towards the end of the year when the festive season kicked in. The industry is still not clear on whether the growth is sustainable, and has been seeking a 10% reduction in GST tax rates, among other relief measures.
According to wholesale numbers (vehicles sent to dealerships) released for the month of December, Maruti Suzuki – the country’s top carmaker – had a 15% jump in year-on-year volumes. The company — which has one of the fattest portfolio of small cars – sold over 1.4 lakh cars to dealers against 1.2 lakh cars sold in the last month of 2019.
Hyundai, which has two new models in the new-gen versions of i20 hatch and Creta SUV, had a 25% growth in December sales, but said that companies still need to be cautious. “Looking towards the future, we are proceeding with cautious optimism and positively anticipate green shoots of recovery in 2021,” SS Kim, MD of Hyundai India, said.
Tata Motors continued its strong performance and had an 84% growth in wholesales. “Retail sales was 18% higher than wholesale for the month and pipeline inventory remains thin. We are continuing to debottleneck the supply chain and ramp up our output to meet the increased demand while addressing the availability of electronic components,” Shailesh Chandra, president of Tata’s passenger vehicles business said.
Mahindra & Mahindra said that its overall sales have been affected due to the “continuing supply chain challenges” related to the constantly changing global environment, more specifically the supply shortage of micro-processors (semiconductors) used in Electronic Control Unit (ECUs). “Demand continues to remain strong even after the festive season and as we get into the new year,” Veejay Nakra, CEO of M&M’s automotive division, said.
Naveen Soni, senior VP at Toyota Kirloskar, said that the year 2020 has been “one with several challenges as well as significant learnings”. “… the entire sector has emerged stronger with greater focus on localization and digitalization… we strongly believe that the current economic revival is likely to help sustain the sales momentum in 2021 and we are hopeful that 2021 will see a V-shaped recovery of the economy, thereby helping the industry to bounce back.”
Rajesh Goel, director of marketing and sales at Honda Cars India also said that 2020 was a challenging year. “… but the industry showed great resilience and realigned their businesses in the new normal. Quicker market recovery aided by increased demand for personal mobility and our steady positive sales momentum is very encouraging. With availability of novel coronavirus vaccines in 2021, we expect return of optimism to the market, boosting the consumer sentiment going forward.”