Auto continues to suffer Covid stress
Mumbai:automobile sales in India will likely stay in the slow lane for some time despite a rise in sales in July, given the uncertainties over demand, according to industry experts.
Companies and analysts expect an uptick in wholesales, or factory dispatches, over the next few months to replenish dealer stocks ahead of the upcoming festival season. Also, rural markets and segments such as motorcycles are expected to fare better than the urban markets and cars.
However, rising cases of coronavirus infections and sporadic local lockdowns mean the auto industry faces many hurdles before it can score a full recovery. On Saturday, car and twowheeler makers reported sequential as well as year-onyear (y-o-y) rise in sales in July as the easing of lockdown curbs began to take effect.
Maruti Suzuki India Ltd, the country’s top carmaker, posted a 1.8% year-on-year (y-o-y) rise in local sales at 100,000 units. This was mainly driven by a 49% jump in sales of entry-level cars such as Alto and S-presso, and 26% in utility vehicles such as Vitara Brezza and Ertiga.
However, like some information technology companies, the market uncertainty was also reflected in Maruti Suzuki as it declined to give sales volume forecast when it issued earnings on July 29.
Maruti reported its first ever quarterly loss in the past 17 years in the three months ended 30 June.
Hyundai Motor India Ltd, the second-largest carmaker, posted local sales of 38,200 units, a 2% drop from the year earlier. On a sequential basis, though, both Maruti and Hyundai reported robust growth in sales at 51,274 and 21,320 vehicles, respectively.
In some categories, recovery is expected to be faster than the rest.